Info Edge, the largest shareholder of Bizcrum Infotech, the holding company for Bijnis, has written off its entire investment in the Indian start-up, citing “principles of discretion and prudence,” in the latest drastic market correction in a fast-growing South Asian ecosystem grappling with a weak global economy.
The listed Indian investor has invested around $9.3 million in the New Delhi-based startup, which has raised more than $43 million to date. Sequoia India, Matrix Partners India, Waterbridge and Westbridge are among its backers.
The emerging B-stage chain, whose latest funding round was unveiled in September 2021, aims to be the “operating system for factories,” helping factories to conduct supplies and also generate demand from buyers and other retailers alike.
Info Edge said it is rescinding its investment in Bijnis on principles of prudence and after considering factors including continued cash burn, limited cash availability commensurate with unspecified liabilities with respect to repurchase commitments (including liquidation preference). the company towards the investors under the Shareholders Agreement.”
“However, we will continue to assess the situation and work with other shareholders to rectify the situation,” she stressed.
Rishabh Katiyar, director of Info Edge Ventures, said in a statement to TechCrunch that the write-down on Bijnis was a “technical write-down due to unspecified liabilities” that may materialize “due to buy-back commitments in the existing shareholder agreement signed between the company and the investors.”
“This obligation is conditional in nature and has been factored in based on the conservative accounting policies followed by the Company as per IndAS Accounting Standards. Therefore, this is not a reflection on the company’s financial performance, market opportunity and value proposition. Further, this liability will only materialize if the Company is unable to provide an exit to the principal investors via other exit mechanisms such as a third party sale, listing, among other mechanisms that are specified in the agreements by a specified date in the future and all major shareholders together choose to exercise The buy-back right as an exit mechanism.
The announcement comes after Info Edge on Friday disclosed a $33.4 million loss at 4B Networks, another startup it recently delisted. 4B Networks was founded by Rahul Yadav, the famous founder of Housing.com, and Info Edge has a 57% stake in the latest startup.
The writedowns caused a total loss of $8.4 million for Info Edge in the fiscal year ending March 2023, a sharp departure from the $1.55 billion profit it posted in the previous year. As noted by Indian news and analysis site The Arc, this is Info Edge’s first net loss in six years.