Fidelity Cuts Pine Labs’ Valuation By 9% To $4.5 Bn

SUMMARY

Pine Labs last raised $50 Mn in a funding round in March 2022 at a valuation of $5 Bn

The latest development comes a month after Neuberger Berman cut Pine Labs’ valuation by 38%

Fidelity Investments has also cut the valuation of Gupshup but kept Meesho’s valuation unchanged in May 2023 from April 2023

Fintech major Pine Labs has become the latest Indian unicorn to see a valuation markdown, as its investor Fidelity Investments has slashed its valuation by about 9.2% to $4.5 Bn, as per its SEC filing.

Fidelity Investments participated in multiple funding rounds of Pine Labs. It joined the startup’s funding round for the first time In July 2021, when Pine Labs raised $600 Mn.

However, the fintech unicorn’s last funding round of $50 Mn took place at a valuation of a little over $5 Bn.

The latest development comes a month after Neuberger Berman cut Pine Labs’ valuation by 38%.

Commenting on the latest valuation cut, Pine Labs CEO Amrish Rau said in a tweet, “As I had no clue about how funds do this, I decided to learn a bit more… Most investors need to value investments on a quarter/Semi annual/annual basis. Some Public market & Mutual Funds need to publicly disclose it and some like a VC need not. Each of them follow a valuation methodology based on the fund philosophy and they may differ from each other.”

Explaining that the valuation methodology may vary from investor to investor, Rau said, “In summary, it’s difficult to know the true value of the business till there is a new Term sheet on the table.”

The valuation cut comes at a time when the ongoing funding winter and adverse macroeconomic conditions have hit Indian startups hard. Earlier, Pine Labs planned to go public in 2022 but has been deferring the IPO plans due to the market headwinds.

In FY22, Pine Labs’ net loss rose 4.5% year-on-year (YoY) to INR 259.1 Cr, while operating revenue jumped 1.4X to INR 1,017 Cr.

Besides Pine Labs, Fidelity Investments also cut the valuation of Gupshup. However, there was no change in valuation of social commerce unicorn Meesho in May 2023. Last month, the investment firm cut the valuation of the startup by 9.7% to $4.4 Bn.

In April 2021, the Bengaluru-based social commerce unicorn had raised $570 Mn led by Fidelity Management and B Capital Group.

Founded in 2015 by Vidit Aatrey and Sanjeev Barnwal, Meesho has so far raised about $1 Bn. It counts marquee names like Peak XV Partners (earlier Sequoia Capital), SoftBank, Prosus, and Meta among its investors.