Markdown Season: Fidelity Gives Gupshup An Additional 20% Valuation Jolt

US-based asset management company Fidelity Investments has once again slashed the valuation of SaaS unicorn Gupshup. The company’s valuation has been cut by more than 20% between May and June. 

Fidelity has now valued its holding in Gupshup at $8.08 Mn, at the end of June, trimming it from $10.15 Mn at the end of May this year, according to Fidelity’s monthly disclosure with the US Securities and Exchange Commission (SEC).

In May, Fidelity slashed the fair value of its holding in the Indian startup by 8.4% from $11 Mn as of April 28, 2023.

Meanwhile, the latest investment valuation of Fidelity has seen an over 50% cut from $16.2 Mn — the amount that the former had originally invested in Gupshup in mid-2021. The funding round valued Gupshup at $1.4 Bn.

As per the Economic Times, the updated valuation of Fidelity’s holding in Gupshup also lowers the entity’s total valuation to $697 Mn, snatching its unicorn tag.

Founded in 2004 by Beerud Sheth, Gupshup is a conversational messaging platform that enables companies to enhance customer experience. The startup is said to send over 7 Bn messages per month to enable conversations with customers. It also counts major Indian banks and unicorns, including IndusInd Bank, HDFC Bank, Zomato, Ola, and Flipkart, as its clients.

Gupshup last raised $340 Mn in 2021 with participation from Fidelity Management and Research, along with marquee investors like Tiger Global, Malabar Investments, Think Investments, and Harbor Spring Capital, among others.

Gupshup reported a consolidated net profit of INR 39.9 Cr in FY22, down from INR 52.5 Cr in FY21 while its total revenue increased 53% year-on-year to INR 1,140.7 Cr.

Amid a severe funding winter and weakening investor sentiment towards tech startups globally, several companies have witnessed back-to-back valuation cuts by their top investors.

In May this year, Invesco cut the valuation of its holding in Swiggy, valuing it at $5.5 Bn, which stood at $10.7 Bn in January last year.

BlackRock cut the valuation of BYJU’S by nearly half to $11.5 Bn. Now, Peak XV Partners is also reportedly looking to significantly mark down the fair value of its investment in the edtech giant.

In May, Fidelity also slashed the fair value of ecommerce unicorn Meesho by 9.7%. It also marked down the valuation of fintech major Pine Labs by about 9.2% to $4.5 Bn.