by Deepak Shenoy, Capital Mind Olacabs has raised about $1.18 billion in total, in 7 rounds according to TechCrunch. Recently, it raised $500 million at a valuation of $5 billion. This provides the social media a large amount of content to get agitated about, saying goodness, how can a taxi company that doesn’t own any taxis be worth more than Rs 30,000 crore! But they aren’t exactly valued at that much. You just got conned by the headline. Some investor has 10% of the company and they paid $500 million. That’s where the facts stop. Then you extrapolate, saying oh, if his 10% is worth $500 million, the company should be worth 10 times that? Wrong. Because he’s not just an arbitrary investor. He has the power of those two words: Liquidation preference (LP). What is an LP? And Why Can’t They Invent Better Acronyms? To the second, I am with you. I can feel your pain, though I haven’t held a vinyl record in the last 10 years. We’ll call it “Liq-Pref” but we just know you’ll hate that more. But let’s get back to the story. A Liquidation Preference is simply this: Dude, I put in $500 million money, you give me some shares, okay, whatever. But if you sell this company, for any amount, then I first take my $500 million back. Kapiche? That’s gone. It’s my capital back to me. You don’t see any of it. Then, if there is any money leftover, I take my 10% through…
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Google removes apps of Matrimony.com, Shaadi, and other Indian companies for not complying with the Play Store billing policy
Speaking to Medianama, founders of the concerned companies alleged Google was the one not in compliance with the Indian competition regulator's antitrust order.
Haryana Police Seeks Cancellation of Visas, Passports of Protesting Farmers Identified Through CCTVs, Drone Footages
According to reports, farmers have also informed that their phones are being put on surveillance, and that they are being notified by the police...
Under the updated regulatory framework, sandbox entities must process all the data, in its possession or under its control, in accordance with the provisions...
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Views: Response to NPCI CEO’s comments that what is not written in regulations is a no-go for fintech entities
NPCI CEO Dilip Asbe recently said that what is not written in regulations is a no-go for fintech entities. But following this advice could...
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The existing commission-based model, which companies like Uber and Ola have used for a long time and still stick to, has received criticism from...
Factors like Indus not charging developers any commission for in-app payments and antitrust orders issued by India's competition regulator against Google could contribute to...
Is open-sourcing of AI, and the use cases that come with it, a good starting point to discuss the responsibility and liability of AI?...
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