Eruditus won’t know the impact of the ongoing valuation markdown until it goes for the next funding round, said founder and CEO Ashwin Damera, discussing the possible repercussions after the US-based The Private Shares Fund slashed the fair value of the edtech unicorn by 9 percent in the March quarter.
Damera clarified that the late-stage venture capital fund, which marked down its valuation was not a direct investor in the startup but a limited partner to one of its existing funds. He was speaking at TiE Con Mumbai 2023.
“The fund that invested in us has not marked as down, but their LP has. So I'm still trying to understand this. Markups and markdowns are all part of a startup's life. I speak broadly for entrepreneurs, we are very excited by markups. And then we're super pissed when that markdown happens,” he said.
Damera was in conversation with his fellow members of the newly-formed Tech Entrepreneurs Association of Mumbai (TEAM). UpGrad co-founder and MD Mayank Kumar, Aakrit Vaish, co-founder and CEO of Haptik; and Sreevathsa Prabhakar, founder and CEO of Servify were on the panel with him.
Based on the recent valuation markdown, Eruditus is currently valued at $2.9 billion down from its previous valuation of $3.2 billion.
“I have no idea. It actually means nothing. It will only be clear when we raise our next round, nobody knows the valuation till now. That's the nature of it. Right? And by the way, when we may raise the next round with clean terms,” he said when asked about the impact of this markdown.
Speaking of the ongoing trend of valuation markdowns seen across unicorns and decacorns like BYJU’s, Swiggy, PharmEasy, Oyo, Pine Labs, Ola etc., Damera said, “We as entrepreneurs also have to accept the fact that this is the journey that we have signed up for. We should celebrate the markups and celebrate the markdowns also, and learn from it. I would love to meet that investor who has marked us down without our projection and understand what they are thinking.”
upGrad’s Kumar agreed. He said, “Be it growth stage or early stage companies, sometimes you have to just be realistic in your valuation expectation. We're here to build a company for the long term, we're not here to build the company for today or tomorrow.”
“If you're here to build a company for the next five years, 10 years, 15 years, 20 years, then taking a down round at this point in time should not be a make or break for any organisation,” he added.
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