By Bitwave 
In a recent move that has sent shockwaves through the Indian startup ecosystem, Info Edge, the largest shareholder in Bizcrum Infotech, the holding firm of Bijnis, has announced that it is writing off its entire investment in the company. This decision comes as part of a broader trend of market corrections in the South Asian ecosystem, which is grappling with the weakening global economy.
Background on Bijnis and Info Edge’s Investment
Bijnis, a Series B-stage startup based in New Delhi, aims to become the "operating system for factories," helping plants procure supplies and generate demand from buyers and other retailers. The company has raised over $43 million to date, with prominent investors such as Sequoia India, Matrix Partners India, Waterbridge, and Westbridge backing it.
In September 2021, Bijnis secured funding in a disclosed round, but the details of the investment were not made public at that time. Info Edge had invested approximately $9.3 million in the startup.
Reasons for Writing Off Investment
In its announcement, Info Edge cited "principles of conservatism and prudence" as the reasons behind its decision to write off the entire investment in Bijnis. The company’s statement also mentioned that it would continue to evaluate the situation and work with other shareholders to remedy the issue.
Rishabh Katiyar, principal at Info Edge Ventures, provided further clarification on the matter. According to him, the write-off was a "technical write-off due to unspecified liabilities" related to buyback obligations in the existing shareholders’ agreement signed between the company and investors.
Katiyar explained that this liability is contingent in nature and has been factored into the company’s accounting policies in compliance with IndAS standards. He emphasized that this move does not reflect on Bijnis’s financial performance, market opportunity, or value proposition.
Impact of Write-off on Info Edge’s Financials
The announcement of the write-off comes on the heels of another recent disclosure by Info Edge regarding a loss of $33.4 million in 4B Networks, another startup it had written off recently. 4B Networks was founded by Rahul Yadav, Housing.com’s infamous founder, and Info Edge owned a 57% stake in the company.
The write-offs have triggered an overall loss of $8.4 million for Info Edge in the financial year ending March 2023, marking a sharp departure from the $1.55 billion profit it had posted the previous year. This is the first net loss for Info Edge in six years, as pointed out by The Arcpoint.
Market Corrections and Impact on Indian Startup Ecosystem
The recent market corrections in the South Asian ecosystem are a reflection of the broader economic trends affecting global economies. As the Indian news and analysis website The Arcpoint noted, this is not an isolated incident but rather part of a larger trend of market corrections that can be observed across various industries.
The write-offs by Info Edge serve as a reminder to investors and startups alike of the importance of prudent investment strategies and the need for regular evaluations of their investments. As the Indian startup ecosystem continues to grow and evolve, it is essential for companies to remain vigilant and adapt to changing market conditions.
Conclusion
In conclusion, the decision by Info Edge to write off its entire investment in Bijnis highlights the complexities and uncertainties inherent in the venture capital landscape. While the reasons behind this move are understandable from a conservative accounting perspective, it also underscores the importance of prudent investment strategies and ongoing evaluations of investments.
As the Indian startup ecosystem continues to navigate these challenges, it is crucial for investors, startups, and policymakers to collaborate and develop strategies that promote sustainable growth while mitigating risks.
Related Articles
- Goldman Sachs’ David Solomon tells startups to reconsider going public: Dominic-Madori Davis
- Netradyne snags $90M at $1.25B valuation to expand smart dashcams for commercial fleets: Rebecca Bellan
- Google strikes world’s largest biochar carbon removal deal with Indian startup Varaha: Jagmeet Singh
Stay Up-to-date on the Latest Developments in Venture Capital and Beyond
Subscribe to our newsletter for regular updates on market trends, company news, and analysis of the latest developments in venture capital. Follow us on social media to stay informed about the latest stories and insights from the world of technology and entrepreneurship.