Info Edge Reevaluates Rahul Yadav's Startup, Values it at $0 after Investing Millions
Info Edge believes the proptech startup, with its high cash burn, may struggle during the current funding winter
11 February 2023
|
Jayashri Ghorpade
The former poster boy of India's first startup cycle, who was unceremoniously fired from his own company, is not having better luck in the country's second startup cycle either.
Infoedge has marked down the value of Rahul Yadav’s new startup 4B Networks to zero after investing Rs. 276 crore in the company just last year.
Info Edge hinted that 4B Networks was running out of money, and would find it hard to survive in the coming months.
Info Edge has written off its entire investment in proptech startup 4B Networks, led by Rahul Yadav of Housing.com. The company invested Rs 276 crore in 4B as of September 2022, but wrote it down due to uncertainty in the funding environment.
Info Edge has fully written off its investment of Rs 276 crore in 4B Networks, led by Rahul Yadav of Housing.com, due to concerns that the proptech startup may struggle during the current funding drought due to high cash burn. The impairment charge was recorded as an exceptional item in Info Edge's Q3FY23 results. The investment was made through Info Edge's subsidiary Allcheckdeals India. 4B Networks, through its platform Broker Network, connects real estate developers, brokers, and buyers for effective communication.
Info Edge reported in the September 2022 quarter results that it made an additional investment of Rs 90 crore, bringing its total investment to Rs 276 crore for the purpose of strengthening its real estate offerings. During an analyst call, CEO Hitesh Oberoi was asked about the rapid change in sentiment from investment in the platform four months ago. He stated that it would be difficult to raise money in the future.
Apply to Xartup Fellowship Program
Get ₹1.5 Crore Technical Funding
"We have fully impaired our investment of Rs 276 crore in all 4B network limited to our subsidiary in line with the company policies and principles of conservatism consistently followed by the company. While we continue to believe that their industry tech market has potential and hope that this investment will work out, we took this decision to write down the investment in light of the current state of the environment and the significant uncertainty towards funding options available to 4B going forward,” Oberoi said.
Info Edge CEO Chintan Thakkar said the company invested more money in 4B Networks due to its interesting idea and initial success. However, given the high cash burn and uncertain funding environment, Thakkar decided to take a full write-off as a conservative measure. He added that there's uncertainty about the future funding scenario.
Startup news delivered to your mail
Recommended for you
Financial Misreporting Takes a Toll on Indian Start-Ups
Oracle's Workforce Reductions, Hundreds of Employees Sacked, and Job Offers Cancelled
Paytm CEO Expresses Concern, Superintelligent AI and the Fate of Humanity
