Bengaluru-based online classifieds and services portal Quikr lost its unicorn status after its major investor, Kinnevik AB revised the fair value of its investment by 45 percent.
In the fourth-quarter earnings call of Kinnevik AB, the Swedish investment firm announced that the drop in valuation was a result of Quikr's exaggerated revenue. As a result, Kinnevik revised Quikr's valuation downwards to $565.70 million, according to the RoC filings accessed by YourStory.
"We made a revision of our valuation of Quikr as a result of fraudulent behaviour in the company," Georgi Ganev, CEO of Kinnevik AB said.
Certain dealers and vendors within the managed rental and car segments of Quikr had placed fictitious or misrepresented transactions on the platform.
Earlier in December 2018, YourStory reported that three officials of the classified startup were accused of faking business transactions. Quikr had also filed complaints against its zonal manager, area manager, and accounts head. The company's officials were accused of fraud by faking transactions in the name of non-existent clients.
Samuel Sjostrom, Head of Strategy at Kinnevik AB said,
"The direct effect of this is two-fold. Firstly, the value of revenue generated in these categories may be overstated. Secondly, there is a risk that some receivables may not be entirely recoverable. As a response, the company has reduced its footprint in the concerned segments as managing its overall cost base."
Additionally, Quikr has strengthened its internal operational controls and is pursuing legal actions against those responsible.
In an official statement, Quikr said, “Certain anomalies have come to our notice in our PG transaction business involving our employees, and we are working with external parties for legal action against all the parties involved. We may not be able to disclose more information as it may hamper the ongoing investigation.” The company had refused to comment on this.
On December 27, 2019, Quikr reported consolidated gross revenue of Rs 273 crore in FY2019, up 68 percent from Rs 175 crore in the previous year.
According to Georgi, Quikr had apparently laid off "half of the workforce," to become profitable faster and not depend on funding.
(Edited by Suman Singh)
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