Fidelity Marks Up Meesho, Pine Labs Valuations

No Respite: Fidelity Cuts Valuation Of Meesho, Pine Labs Again

SUMMARY

According to its update for the month ended July 31, 2023, Fidelity said its stake in Meesho was worth $43.24 Mn, up from $41.02 Mn as of June 30, 2023

At the same time, Fidelity valued its stake in Pine Labs at $34.77 Mn as of July 31, 2023, up 4.6% from $33.24 Mn as of June 30, 2023

This is the second valuation uptick for Pine Labs, as Baron Capital marked up its valuation, alongside Swiggy, earlier this week

After multiple cuts, US-based asset management company (AMC) Fidelity Investments has increased the valuations of ecommerce unicorn Meesho and fintech unicorn Pine Labs, according to the monthly update filed with the US Securities and Exchange Commission (SEC).

According to the update for the month ended July 31, 2023, Fidelity said its stake in Meesho was worth $43.24 Mn, up from $41.02 Mn as of June 30, 2023. This translates to an increase of 5.41% in the ecommerce unicorn’s valuation.

At the same time, Fidelity valued its stake in Pine Labs at $34.77 Mn as of July 31, 2023, up 4.6% from $33.24 Mn as of June 30, 2023. However, the valuation of SaaS unicorn Gupshup remained unchanged.

Earlier, Fidelity cut Gupshup’s valuation thrice between April and June 2023.

Incidentally, this is the second valuation uptick for Pine Labs, as Baron Capital marked up its valuation, alongside Swiggy, earlier this week.

It must be noted that Fidelity marked down the valuations of Indian startups in the past three to four months. It cut Meesho’s valuation by 9.7% in April and Pine Labs’ valuation by more than 9% in May 2023.

Following the funding bull run of 2021 and early 2022, the Indian startup ecosystem has been hit hard by macroeconomic headwinds since mid-2022. This has dried up the capital for Indian startups. With profitability becoming the buzzword, startups have started focusing on turning profitable. Meanwhile, loss-making startups have been seeing valuation markdowns from investors.

To be sure, a valuation markdown by an investor does not immediately mean that a startup’s valuation has fallen or risen. A private company’s valuation is decided at the time of fundraising and only reduces if it raises a down round, that is a funding round at a reduced valuation.

As such, investors making changes to valuations is them reevaluating the value of their stake in a given startup, depending on factors such as financial performance and future outlook.

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