Softbank, which has heavily backed some of the biggest startups of India, has written off close to $555 million in Ola and Snapdeal. This news comes via company’s half yearly earnings report.

For the six months period that ended on 30th September 2016, Softbank reported a loss of ¥58.1 billion from financial instruments compared to a gain of ¥112.6 billion in the year-ago period.

In a statement, the company explained:

Gain or loss arising from financial instruments at FVTPL (fair value through profit or loss) comprises mainly changes in fair value of preferred stock investment including embedded derivatives, such as ANI Technologies Pvt. Ltd and Jasper Infotech Private Limited in India, designated as financial assets at FVTPL.

However, in the second quarter results announcement from the firm, it posted a profit of ¥528.6 billion ($5.1 billion). The reason behind the boost is said to be favourable exchange rate, as well as healthy operations in home market Japan.

The news about investment write-off in Ola and Snapdeal comes at a time when both startups are facing stiff competition and are looking for a fresh fund-raise.

Recently, we reported that Ola is looking to raise around $600 million by the end of this year. The upcoming fund-raising is aimed at making Ola the leader in the cab-hailing market of India, where it is competing against Uber.

Both Ola and Uber have spent a lot of money in order to get new customers on-board. Further, the companies keep spending money in offering discounts to retain customers.

On the other hand, Snapdeal seems to be struggling against rivals too – Amazon and Flipkart. Excluding discounts and product returns, Snapdeal’s gross sales slowed to 90% in the year that ended on 31st March from 301% in the previous year.

Further, the company has moved out of its office in several cities and has moved to co-working spaces. The move is said to be taken in order to cut costs. The company has spent around Rs. 200 crore for marketing campaign after unveiling its new identity.

Till now, Ola has raised more than $1.23 billion in eight funding rounds, while Snapdeal has raised around $1.7 billion so far, in twelve funding rounds.

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