The valuation battle over tech companies continues — this time, and most recently, in India.
The Wall Street Journal reported Wednesday (March 2) that investors backing the nation’s biggest eCommerce company, Flipkart, have slashed estimations of the company’s valuation, sending yet another shot across the bow that, maybe, startups are going to be getting less interest and less generous terms.
Filings with the United States Securities and Exchange Commission show that the company, which was valued at $15 billion last summer, has come a long way ... down. Its valuation has been sliced by as much as 23 percent. As has been seen in other regions, most notably in Europe and the United States, the valuation haircut has been somewhat of a hallmark in so-called tech unicorns valued at, at least, $1 billion. The key to the investor jitters has been slowdowns in global growth. Morgan Stanley, which has a 0.6 percent stake in Flipkart, took its fair value estimate down by 23 percent, to $59 million in the latest quarter, down from $77 million sequentially.
Similarly, Fidelity Rutland Square Trust Strategic Advisers Growth Fund lowered the value of its 0.05 percent stake in Flipkart by the same amount, this time to a much smaller relative stake, standing at $5.4 million. Variable Annuity Life Insurance cut its 0.01 percent holding by 11 percent through the end of the year.
In India alone, the nation saw nearly $1 billion invested into tech startups as of the final quarter of 2015, which was less than 33 percent of the tally seen in the previous quarter and fully half of levels seen a year ago, WSJ said, quoting research firm Tracxn. Valuations have been headed lower in the region after initial assumptions that India’s eCommerce and Internet growth would follow or even rival that of China. Analysts have said that Flipkart sold as much as $6 billion in goods last year, at about half of the total market. The company is still not profitable, as a relatively small percentage of people in India actually shop online.