Tokyo Based Softbank group’s has cut the value of both Ola (ANI Technologies) and Snapdeal (Jasper Infotech) by $550 million. Earlier SoftBank invested a US $627 million in Snapdeal and US $210 million in Ola in October 2014. It has also made follow-on investments in both firms.
A write down is a fall in the projected value of an asset, that also at a time when both startups are looking for fresh rounds of Investments to fuel their growth amid tough competition from rivals Uber and Flipkart respectively.
SoftBank Group in its recent report confirmed a loss of huge ¥58.1 billion from financial functions for the last six-month period winding up to 30 September 2016 instead of a profit of whooping ¥112.6 billion in the last year period.
“Loss or Profit from financial functions at (fair value through profit or loss) FVTPL includes mainly fluctuations in fair value of ideal stock investment including embedded byproducts, such as OLA (ANI Technologies Pvt. Ltd) and Snapdeal (Jasper Infotech Private Limited) in India, labelled as financial assets at fair value through profit or loss.” Shared by the Japan-based company in its half year supervisory filing.
While seeking clarification and comment by an email, the SoftBank spokesperson refrained from responding. As only these two startups names have been shared, it is possible that they are responsible for the most or accounted for complete chunk of the write-down.
SoftBank Groups has financed more than USD $2 billion in India so far and the bulk of its funds, around USD $1.3 billion, has been installed in Snapdeal and Ola. Tokyo’s SoftBank also has invested in Oyo (hotel booking platform), Housing.com (real estate classifieds player) and Grofers (grocery delivery app).
Posting a profit of 528.6 billion yen ($5.1 billion), advanced by a advantageous exchange rate, as well as by strong setups in home market Japan, Declared during second quarter result by SoftBank Goup on Monday
Ola is considering raising fresh fund of US $300-500 million from other investor It was recently reported. So far Ola has raised up US $1.23 billion in nearly eight rounds from almost 20 funders, including, Matrix Partners, Accel Partners, Softbank and several individual investors. The Startup is in discussions with most of the VC firms that have provided funds in the company so far.
Previously, this year Bengaluru based company witnessed its estimation value scaling down from US $15 billion to around US $9 billion when five investors (Valic, Vanguard, Morgan Stanley, T Rowe Price, and Fidelity) informed write downs of their funds in the Flipkart.