Fidelity marks down Meesho’s valuation to $3.5 billion

Adding to a growing, not-so-favourable list of high-profile Indian unicorns getting their valuations slashed, Meesho is now seeing global investment firm Fidelity yet again mark down its valuation. Fidelity has reassessed the social commerce platform’s valuation to $3.5 billion. This comes as a continuation of Fidelity’s periodic reassessments of its investment portfolio.

Fidelity’s recent monthly disclosure indicated a fair value of Meesho at $3.2 billion, a decline from its original valuation of $5 billion. The firm had previously cut Meesho’s valuation to $4.1 billion from $5 billion in October 2023, citing factors such as changes in the public market counterparts and a secondary sale transaction.

This latest markdown represents a 33.6% decline in valuation from the time Fidelity invested around $42 million in Meesho’s Series F round in October 2021. While Fidelity’s calculations suggest a fair value of $27.8 million for its stake in Meesho at the end of December 2023, down from the $41.9 million invested in the second half of 2022, Meesho disputes this, asserting that the correct valuation stands at $3.5 billion. The discrepancy is attributed to an increase in outstanding shares, notably due to the expansion of the Employee Stock Ownership Plan (ESOP) pool.

Meesho, counted among the fastest-growing e-commerce startups in India, has situated itself in Tier 2+ cities, contributing to its impressive 32% year-on-year growth in the user base in December 2023. Despite the valuation adjustments, the social commerce platform boasts a current gross merchandise value (GMV) run rate of over $5 billion.

Fidelity’s valuation reassessments extend beyond Meesho, with slight markups in the value of its holdings in Reddit, Gupshup, and X. However, these startups remain below their original investment dollars.