Norway's Oda loses unicorn status with new round

Online grocery delivery company Oda has raised 1.5 billion Norwegian kroner (around $150 million) at a significant valuation cut.

The round, which was backed by investors including Summa Equity, Verdane and Kinnevik, gives Oda a valuation of roughly 3.5 billion kroner, just over a third of its previous 10.2 billion kroner valuation achieved last year—equivalent to $1.2 billion at the time.

The global downturn for venture has put pressure on startup valuations, particularly for highly valued companies at the later stages. According to PitchBook's Q3 2022 European VC Valuations Report, the percentage of European deals resulting in a valuation cut has increased from 14.9% in 2021 to 17.4% in Q3 of this year.
   

The inflated market of 2021 caused a sharp increase in valuations, which in some cases did not accurately reflect a company's worth. Now, with investors more realistically assessing their portfolios, European valuations are expected to fall and down rounds to become more prevalent.

Certain sectors have been hit worse by the new market conditions than others, with grocery delivery among them. The sector saw huge interest during the pandemic as online shopping proliferated and users sought to avoid public spaces.

However, overcrowding and narrower profit margins with the cost of living have dampened investor appetite, and funding levels have fallen.

One of Europe's largest players in grocery delivery, Gorillas, was reportedly seeking investment earlier this year at a lower valuation, while Kinnevik marked down its investment in Sweden's Mathem by 86.7% between Q3 2021 and Q3 of this year. Layoffs have hit others in the space, including Gopuff. Oda has also announced that it is scaling back its international expansion plans until it is profitable in existing markets.

Alongside Oda's equity round, existing backers including Rasmussen Group and Prosus have agreed to invest further capital through debt conversion, whereby debt is converted into equity at a later date. One notable absentee from the round is SoftBank, whose Vision Fund arm reported a nearly $10 billion quarterly loss last month.

Featured image by eamesBot/Shutterstock

This article originally appeared on PitchBook News