Fidelity Cuts Gupshup’s Valuation By Another 8.4%

US-based asset management company (AMC) Fidelity Investments has slashed the valuation of Gupshup once again, trimming the fair value of its holding in the SaaS startup by 8.4% as of May 31, 2023.

Fidelity cut the fair value of its stake in Gupshup to $10.15 Mn as of May 31 from $11 Mn as of April 28, 2023, as per its filings with the US Securities and Exchange Commission.

More importantly, this valuation is 37.4% lower from $16.2 Mn at which Fidelity valued Gupshup while investing in the startup in August 2021.

It is pertinent to note that fair value updates issued by many investors are a regular phenomenon and depend on the investor’s internal policies. Valuation methodologies also vary from investor to investor and slashing of valuation by one investor does not necessarily mean that it would be perceived negatively by other investors. However, it may have a ripple effect.

Founded in 2004 by Beerud Sheth, Gupshup is a conversational messaging platform that helps companies enhance customer experience. It claims to send over 7 Bn messages per month to enable conversations with customers and counts major Indian banks and unicorns as its clients.

The startup last raised $240 Mn in a follow-on funding round in July 2021 which saw participation from Fidelity Management and Research, Tiger Global, Think Investments, Malabar Investments, Harbor Spring Capital, among others.

Gupshup’s total revenue jumped 53% to INR 1,140.7 Cr in the financial year 2021-22 (FY22) from INR 747.6 Cr in the previous fiscal, while its net profit narrowed 24% year-on-year% to INR 39.9 Cr.

Over the last few months, the ongoing funding winter and adverse macroeconomic conditions have resulted in a number of investors cutting the valuations of Indian startups in their portfolios.

The Private Shares Fund cut the fair value of Eruditus by 8.56% in the March quarter, while investment firm Vanguard Group slashed the valuation of ride-hailing unicorn Ola for the third time by 35% to $4.8 Bn in May 2023 from $7.4 Bn .

Meanwhile, there are no signs of the end of the funding winter. According to Inc42’s H1 2023 Startup Funding Report, the funding raised by Indian startups declined 10% to $5.4 Bn in the first half of 2023 (H1 2023) from H2 2022. The number of deals also fell 25% to 462 in H1 2023.