Info Edge writes down Rs 276 crore investment in Rahul Yadav’s startup 4B Networks

4B Networks is led by Housing.com’s founder Rahul Yadav (in picture)

Info Edge has written down its entire investment in proptech startup 4B Networks, which is led by Housing.com’s founder Rahul Yadav. The company had invested Rs 276 crore in the company as of September 2022 and attributed the write-down due to concerns around the uncertainty of the funding environment.

Info Edge has written down its entire investment of Rs 276 crore in Housing.com’s Rahul Yadav-led 4B Networks as the company believes that the proptech startup might find it difficult to weather the ongoing funding winter due to its cash burn.

The company said impairment of Rs 276 crore was charged as an exceptional item in its Q3FY23 results. Info Edge had invested in 4B Networks through its subsidiary Allcheckdeals India.

4B Networks, through its platform Broker Network, allows real estate developers and brokers to communicate, and also connects brokers with buyers.

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When Info Edge announced its results for the September 2022 quarter, it had said that it made an additional investment of Rs 90 crore which brought up its total investment to Rs 276 crore and that the investment was to help strengthen the company’s offering in the real estate segment.

When asked on the analyst call about the rapid turnaround in sentiment when the company made investments in the platform until four months ago, Chief Executive Officer Hitesh Oberoi said it was difficult to see the company raising money going forward.

"We have fully impaired our investment of Rs 276 crore in all 4B network limited to our subsidiary in line with the company policies and principles of conservatism consistently followed by the company. While we continue to believe that their industry tech market has potential and hope that this investment will work out, we took this decision to write down the investment in light of the current state of the environment and the significant uncertainty towards funding options available to 4B going forward,” Oberoi said.

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He added that it was an interesting idea and the company did well for a while as well, which is why Info Edge invested more money.

Info Edge Chief Executive Officer Chintan Thakkar said the company was optimistic and 4B Networks was showing good growth.

Thakkar said that in the last few months, given the rate of cash burn and the overall funding environment, there's a lot of uncertainty about the future funding scenario. Following the principles of conservatism, the CEO added that this was the reason the company decided to take a full write-off in this case.