It is the latest instance of large Indian start-ups facing valuation markdown by investors amid a funding winter and macroeconomic uncertainty. Neuberger Berman funds reduced the valuation of Pine Labs to $3.1 billion as of February 28, 2023 from $5 billion, according to the regulatory filings with the Securities and Exchange Commission (SEC) of USA.
Another investor Invesco, which recently reduced the valuation of food delivery firm Swiggy, has maintained Pine Labs’ valuation at $5 billion. Pine Labs has raised a total funding of $1.61 billion from investors that include Vitruvian Partners and Alpha Wave Global.
Neuberger Berman funds reduced API Holdings’ valuation to $4.4 billion from $5.6 billion. In October 2021, PharmEasy raised $350 million in a pre-IPO round from a slew of new investors, valuing the company at $5.6 billion.
API Holdings said in August last year has decided to withdraw its draft red herring prospectus (DRHP) filed with the Securities and Exchange Board of India (Sebi). It cited volatile market conditions and ‘strategic considerations’. The DRHP was filed on November 9, 2021.
API Holdings, the parent entity of PharmEasy, is a digital healthcare platform that competes with companies such as 1mg, Netmeds, Flipkart Health+ and Amazon Pharmacy.
“Many unicorns have seen their valuations drop. Tech unicorns that went public in 2021 have experienced a similar drop. Investors are being careful about backing firms that are solely focused on rapid expansion without a clear path to profitability and sustainability,” said Neha Singh, co-founder at data analytics firm Tracxn. “This trend is expected to continue for the near future and we might see more such down rounds in the coming months.”
Valuation markdowns
US-based asset manager BlackRock has reduced the valuation of Byju’s by about 50 per cent to $11.5 billion. This is a sharp decrease from the $22 billion at which the edtech decacorn was valued at in 2022.
“In 2022, as global tensions rose with the start of the Russia-Ukraine war and rising inflation, investors became more cautious, causing a reduction in capital flow and an overall drop in valuations of tech companies across both public and private markets. In 2022, we saw a drop of 37 per cent in VC funding at a global level as compared to 2021,” said Singh.
Singh said similar trends were observed in the Indian startup ecosystem, which saw a 39 per cent decrease in funding in 2022 after receiving its highest funding ever in 2021.
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