It’s simple – every business has to make money or else slowly experience the irrelevance phase. With the emergence of new age competition such as Urbanclap and Housejoy, incumbents including JustDial, OLX and Quikr are grappling with ‘inability to make money’ syndrome.
Owing to dismal performance and poor future outlook, Quikr prime backer AB Kinnevik has markdown its valuation by 12 percent during the calendar year 2017. The Swedish investment firm nearly owns 18 per cent stake in the Bengaluru-based online classifieds platform.
Following the markdown, Quikr valuation has slipped down to $884.94 million. It essentially implies that the company has lost the Unicorn status, as per Kinnevik. The backer of Rocket Internet’s portfolio in India has valued its shareholding in Quikr at $159.29 million for the year ended December 2017, reports Mint.
A year ago, Kinnevik had marked Quikr holdings at $180 million (the calendar year 2016).
Interestingly, it had inflated the value of the company to the tune of $1.47 billion in October 2016. At that time, its entire shareholding was valued at $265 million.
Importantly, Quikr is not the only Unicorn that is facing threat to its $1 billion valuation crown. Tiger Global-funded e-commerce marketplace Shopclues also been going through bad time.
The logic behind their diminishing relevance as well as values is based on fundamental logic – revenue. FYI, Quikr had recorded a total revenue of Rs 64 crore in FY17 while Shopclues revenue stood at Rs 275 crore in FY18. The Pranay Chulet-led company is yet to file financial figures for the last fiscal.
So far, Quikr has scooped up about $400 million from the likes of eBay, Tiger Global, Coatue Management, Falcon Edge amongst others. It’s worth noting that Kinnevik also had upscaled the valuation of Quikr in 2016 to $1.47 billion.
Currently, India has 11 Unicorns, out of which a couple of them including Quikr technically are losing the coveted status. Nevertheless, hotel brand Oyo and the three years old surface logistics company Rivigo are set to fill their void.
Notably, the SoftBank along with eBay had written-off their bets on the Gurugram-based online marketplace Snapdeal.
Eyeing a billion USD valuation, Swiggy is also set to be valued at $1 billion in an upcoming round from DST, Coatue and existing investors.
The news of Quikr losing Unicorn status shouldn’t bother folks like us (aka real startups) who rather require caring more about real metrics (aka revenue) than vanity that comes as default burden with institutional investors.