Postman Strikes Secondary Deals With 30-40% Cut In Valuation

SaaS platform Postman, which was once valued at $5.6 Bn (INR 46,925 Cr), has reportedly struck secondary deals recently at a steep 30-40% discount to its peak valuation.

While secondary deals usually see a 10-15% discount to the last primary valuation, but the sharp discount in Postman’s valuation points to the decline in value for SaaS firms on revenue multiples, ET reported.

Angel and early investors have partially sold their stakes in the Bengaluru-based firm in the latest rounds, multiple sources were quoted as saying in the report.

Founded in 2014 by Abhijit Kane, Abhinav Asthana and Ankit Sobti, Postman specialises in the enterprisetech sector. It offers API (application programming interface) tools to its customers. Its plan charges begin from $14 per month, which covers most of its basic services.

In 2021, Postman raised $225 Mn in its Series D funding round led by Insight Partners, Coatue, Battery Ventures and Bond. Existing investors such as CRV and Nexus Ventures also participated in the round, almost tripling its valuation to $5.6 Bn from its initial valuation of $2 Bn.

Postman also saw participation of DoorDash product leader Gokul Rajaram and Freshworks Girish Mathrubootham as angel investors in the round. With this round, the API-based startup has raised more than $430 Mn from investors. 

2021 was a boon to the Indian startup landscape as it attracted the likes of investors across the globe. The result was investors infusing a whopping $42 Bn in Indian startups in 2021, which resulted in the creation of a record 44 unicorns during the year, as per Inc42’s report.

However, the tables have turned for the companies as it has been struggling to sustain the interests of investor firms. The three most prominent valuation cuts from 2023 include unicorns like BYJU’S, Meesho and PharmEasy.

Following the trail of markdowns, the US-based asset management company Fidelity cut the valuation of Meesho on its book to $3.5 Bn, in January. This marks a decline of 29% from Fidelity’s peak valuation of $4.9 Bn for Meesho.

Meanwhile, US-based Vanguard slashed the valuation of Bhavish Aggarwal-led Ola Cabs, in February. The investment firm has marked down the valuation by 29% to $1.88 Bn on its books from $2.65 Bn earlier. According to an ET report, this is a 74% mark down from Ola’s peak valuation of around $7.3 Bn. 

Recently, US-based fund manager Invesco marked down the valuations of its portfolio startups, IPO-bound Swiggy and Pine Labs, on its books at the end of April 2024. 

As per an SEC filing, Invesco pegged foodtech major Swiggy’s valuation to $12.3 Bn, marking a decline of 3% from the $12.7 Bn. On the other hand, Invesco striked down fintech startup Pine Labs to $3.5 Bn at the end of April 2024, down 8.5% from $3.8 Bn in January 2024.