Ola Valuation Drops to $1.25 Billion

Ola’s valuation has recently declined to $1.25 billion, as revealed by a filing from the US-based asset management firm Vanguard. This marked decrease reflects a staggering drop of over 80% from the company’s peak valuation of $7.3 billion recorded in 2021.

Valuation History and Revisions

Initially, in February 2024, Vanguard assessed the company led by Bhavish Aggarwal at under $2 billion, specifically at $1.88 billion. However, a subsequent revision in November brought it back to around $2 billion.

Market Position and Competitors

This situation arises as Ola pursues its ambitions for a public listing, despite losing significant traction in the ride-hailing sector, which includes cabs, autos, and bikes. Currently, Rapido has secured the top position in this market, followed by Uber, with Ola now occupying third place.

Strategic Rebranding and IPO Plans

In August of the previous year, CEO Bhavish Aggarwal disclosed that Ola Cabs would be rebranded as Ola Consumer, with plans to integrate its financial services, cloud kitchens, and electric logistics into a cohesive brand. Although the company transitioned to a public entity in November 2024 and began evaluating IPO options, tangible steps towards a listing remain absent.

Analysts Forecast Delayed IPO

Industry analysts predict that Ola’s IPO plans could be postponed by at least six months due to challenging market conditions, particularly given the declining market capitalisation and share price of Ola Electric.

Financial Performance Overview

During the fiscal year 2024, Ola experienced a decline in operating revenue by 5.5%, falling to Rs 2,012 crore from Rs 2,128 crore in fiscal year 2023. Despite this dip, the company managed to significantly reduce its losses to Rs 10 crore in FY24, a notable improvement from Rs 623 crore in the prior fiscal year. Additionally, the Bengaluru firm achieved EBITDA profitability in FY24.

Rival Success and Market Dynamics

Meanwhile, Rapido achieved unicorn status last year, securing $200 million at a valuation of $1.1 billion. The Swiggy-supported company has also outperformed Ola in combined daily rides across bike taxis, autos, and cabs during the second quarter of fiscal year 2025.

Comparative Revenue Insights

Although Ola has faced market share challenges, its ride-hailing segment remains over twice the size of Uber’s and 2.5 times larger than Rapido’s in terms of revenue. In FY24, Ola reported Rs 1,761 crore in ride-hailing income, contrasting with Uber’s Rs 807 crore from its mobility operations and Rapido’s revenue of Rs 648 crore for the same period, alongside achieving a 45% reduction in losses to Rs 371 crore.

Impact of Valuation Downgrade

While the recent downgrade in valuation may not have an immediate financial effect on Ola, it could impact employee morale as the company prepares for its potential debut in the public market.