Softbank writes down $555 mn investments in Ola, Snapdeal

The Dollar Business Bureau

Japanese telecommunications company, SoftBank, has written off the value of two of its biggest start-up investments in India. The company has marked down about $555 million in share value in investments in ANI Technologies, the owner of cab aggregator Ola, and Snapdeal owner Jasper Infotech. 

Out of overall value, about half of the value written-off is the result of appreciation in Japanese currency against the other currencies. 

In its report on consolidated income for the first six months of the current fiscal ended on September 30, SoftBank has winessed a loss of 58,140 million yen (around $557 mn) from its financial assets at the fair value, majorly on account of its funds invested in India. Out of this, a loss of 29,622 million yen ($284 mn) was on account of the appreciation of the yen year-on-year.

“Gain or loss arising from financial instruments at fair value through profit or loss (FVTPL) comprises mainly changes in fair value of preferred stock investment including embedded derivatives, such as ANI Technologies Pvt. Ltd and Jasper Infotech Private Limited in India, designated as financial assets at FVTPL,” the company said in its filings.

SoftBank had invested $627 million in Snapdeal and $210-million in Ola in the month of October 2014. The company has also done further investments in the two firms. 

The erosion in the value of Ola comes at a time when it is struggling to acquire fresh investments of around $1 billion to compete with its rival Uber.

The value of Snapdeal, has also written-down due to competition from its global rival Amazon, who has overtaken the company as India’s second biggest e-commerce marketplace.

Till now, SoftBank has invested nearly $2 billion in India. In May, SoftBank’s Chief Executive Masayoshi Son informed the media that the investment of the company in the country could cross $10 billion in the coming 5-10 years.