SoftBank logs Rs 9000 cr valuation loss from Ola, Snapdeal

A ‘yes’ from Nexus Venture Partners is crucial for Snapdeal sale to Flipkart to go through

SoftBank logs Rs 9000 cr valuation loss from Ola, Snapdeal

ANI Technologies-owned Ola, India's largest cab-hailing application, has seen mounting losses as it battles USA giant Uber for dominance in India. the company reported a seven-fold increase in revenue, but at the same time incurred a loss of Rs 2,313.66 crore (USD 358.01 million). NVP is another crucial investor in Snapdeal and Yes should be likely expected for the biggest e-commerce merger in the country.

Besides Snapdeal and Ola, SoftBank is also an investor in Oyo Rooms, Grofers, and Housing (which was sold to PropTiger earlier last year).

Explaining the $1.4 billion loss, SoftBank said this "mainly resulted from recording a loss as the amount of changes in the fair value of the financial instruments at FVTPL (Fair Value Through Profit or Loss) from March 31, 2016 to March 31, 2017". This was primarily due to the loss on valuation of shares of subsidiaries and associates including Starfish I Pte Ltd, which holds shares in the privately-held Jasper Infotech, which runs Snapdeal.

Their investments include ANI Technologies that runs taxi aggregator Ola, and Jasper Infotech - parent of online marketplace Snapdeal.

Softbank in a release said, "Highly competitive e-commerce market in India has made a trend of the company's business performance lower than initially anticipated". There have also been reports of a potential deal for Alibaba pay systems to be included with those of the combined entity if the deal between Snapdeal and Flipkart was to go through.

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Locked in an intense battle with Tiger Global-backed Flipkart and American e-tailing giant Amazon, Snapdeal has not been able to match the success of its rivals, slipping to a distant third in the e-commerce market.

SoftBank had led a $210-million investment in Ola and $627 million in Snapdeal in October 2014.

The company has also seen its valuation plummet from around $5 billion in 2015 to $3-3.5 billion during the latest round of fund raising.

SBG intends to invest $25 billion over the next five years, making it one of the world's largest private equity investors. The deal would also include SoftBank spending around $1.5 billion to buy-out a double-digit stake held by United States investor Tiger Global in Flipkart.

SoftBank's operating profit for the year to end-March climbed 13 percent to 1.03 trillion yen ($9 billion) on flat revenue growth.

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