Backing Rahul Yadav’s 4B Networks was a mistake, says Info Edge’s Sanjeev Bikhchandani, ET RealEstate

August 26, 2023

Info Edge cofounder Sanjeev Bikhchandani on Friday told analysts that backing Rahul Yadav’s 4B Networks was a mistake.

“You can’t write off Rs 288 crore; it was a mistake,” he told analysts during a conference call after the parent of jobs portal Naukri reported its quarterly results.

The company board on Friday discussed steps to tighten controls and mitigate risks associated with corporate governance of its portfolio investments, he said.

The consumer internet group has initiated arbitration proceedings against 4B Networks, founded by cofounder Yadav, after the startup failed to provide crucial information about its operations and management for a forensic audit.

“We are taking more steps and we continue discussing on a board level on how we need to change some of our diligence practices, tighten it up, what are the signals and indicators and red flags that emerge during conversation with founders,” Bikhchandani said.

Info Edge had written off its equity investment in 4B Networks during the December 2022 quarter citing “excessive cash burn, prevailing liquidity issues and significant uncertainty towards funding options”.

On investments from its second fund of InfoEdge Ventures, from where the company is currently deploying its venture capital dollars, Bikhchandani said: “We are finding it easier, we find the valuations are lower, the round sizes are smaller and we are being careful.”

After the company reported its quarterly financial results for the April-June quarter of 2023, its shares fell 4.23% to close at Rs 4,453 on the NSE Friday.

Info Edge reported a Rs 147.4 crore quarterly net profit on a consolidated basis, almost half compared with Rs 292.4 crore a year earlier, hurt by decreased demand in technology hirings.

Operational revenue rose 14% to Rs 625.9 crore.

“The Naukri business is facing headwinds in IT hiring, however the non-IT hiring market continues to look good. Growth in 99acres continues to be strong. In Jeevansathi, our freemium strategy has helped us bring down our marketing spend and cut burn over the last few quarters,” managing director and CEO Hitesh Oberoi said in a news release.

The recruitment solutions business, which includes, grew 15.4% to Rs 462.1 crore, while the 99acres business for real estate rose 25% to Rs 82.7 crore. Others, including and, grew nearly 1% to 81.2 crore.

  • Published On Aug 12, 2023 at 09:15 AM IST

Join the community of 2M+ industry professionals

Subscribe to our newsletter to get latest insights & analysis.

Download ETRealty App

  • Get Realtime updates
  • Save your favourite articles

Scan to download App

Source link

Abhay Singh

Web Developer

Leave a Comment