Fidelity Puts Gupshup Out Of The Unicorn League, Slashes Valuation To $957 Mn

SaaS unicorn Gupshup is the latest scalp in the valuation markdown spree as the US-based asset management company (AMC) Fidelity Investments slashed the unicorn’s valuation by 31.6%.

According to its regulatory filings with the US Securities and Exchange Commission (SEC), Fidelity Central Investment Portfolio LLC, which holds a stake in the holding company of Gupshup Inc, the parent company of the SaaS unicorn, reduced the fair value of its stake by 31.6% as of March 31, 2023.

Specifically, Fidelity, via Fidelity Central Investment Portfolio LLC, holds 44,950 shares in Gupshup, which the US-based AMC valued at just shy of $1.03 Mn as of June 30, 2021, two months after it invested in the Mumbai-based startup. In the latest valuation update, Fidelity has marked the fair value of its stake down to around $703K.

At the same time, via its Variable Insurance Products Fund III, Fidelity holds 59,838 shares in Gupshup. While the value of the shares was pegged at $1.37 Mn as of June 30, 2021, the latest update pegged the fair value of the shares at slightly over $935K.

This puts the SaaS unicorn’s valuation at around $957 Mn, calculated from its valuation of $1.4 Bn during its unicorn-making Series F round worth $100 Mn in April 2021.

The valuation haircut comes after it reported a 24% year-on-year (YoY) decline in net profits to INR 39.9 Cr, despite its operating revenue jumping 1.5X YoY to INR 1,132 Cr.

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.

Valuation Markdown Galore

Indian unicorns have witnessed a flurry of recent valuation markdowns as global macroeconomic headwinds continue to prevail. Fidelity cut Meesho’s valuation by around 10% to $4.4 Bn on Tuesday (May 30), while BYJU’S saw its valuation slashed to $8.3 Bn by BlackRock on the same day.

Earlier, The Private Shares Fund cut Eruditus’ valuation to $2.9 Bn, Baron Capital cut Swiggy’s valuation to $6.5 Bn, and Janus Henderson and Neuberger Berman reduced PharmEasy’s valuation on two separate occasions. Swiggy also saw Invesco cut its valuation twice in the last two months.

Neuberger Berman, also an investor in Gupshup, did not reduce the SaaS unicorn’s valuation, incidentally, though the investor slashed Pine Labs’ valuation earlier in May.

Ola has also seen a valuation markdown, as Vanguard slashed the ride-hailing unicorn’s value by 35% earlier in May.

It should be noted that the fair value updates issued by many investors are a regular phenomenon and depend on the investor’s internal policies.

These fair value updates do not mean a permanent valuation markdown. For instance, while BYJU’S saw its fair value reduced to $8.3 Bn by BlackRock, the edtech still is raising funds at a valuation of $22 Bn.

First reported by Moneycontrol.