Meesho Valuation Slashed 10% By Fidelity Investments

Homegrown e-commerce marketplace Meesho's valuation has been cut by about 10% by U.S.-based investor Fidelity Investments as burgeoning tech valuations continue to correct amid tighter access to capital.

Fidelity Investments led a Series F round in the Vidit Aatrey-led startup in October 2021. It had taken part in a $570 million round that valued the company at around $4.9 billion.

Fidelity holds shares in Meesho via multiple funds, such as Fidelity Central Investment Portfolio and Variable Insurance Products IV, according to Securities and Exchange Commission filings.

In the first fund, it had pegged the value of its 33,863 shares in Meesho at $2.59 million as of March 31, 2022. That fell to about 9.7%, or $2.34 million, as of March 31, 2023.

In the second fund, it had pegged the value of its 17,100 shares at $1.31 million on Dec. 31, 2022. That also fell 11% to $1.18 million as of March 31, 2023.

The valuation cuts translate to a reduced valuation of about $4.4 billion for the startup.

Meesho is backed by leading global investors such as Prosus Ventures, SoftBank, and Facebook. It also joins several unicorns in India, such as Byju's, Swiggy, Ola, and PharmEasy, which have seen their valuations tumble.

In 2021 and the first half of 2022, access to capital was easier, and hence startups raised large sums of money at lofty valuations. Today, access is tighter with rising interest rates and uncertain macros. Priority for funding is being given to companies that are leaner, have demonstrated proven paths to profitability, and are past the cash-burn stage.

Valuations of listed companies like Zomato Ltd., Nykaa's parent FSN E-Commerce Ventures Ltd., and Paytm parent One97 Communications Ltd. have also tumbled after a bumper 2021.

The reduction in valuation for privately held companies also translates to longer timelines for initial public offerings. Oravel Stays Pvt., the operator of Oyo, and now PharmEasy's API Holdings Pvt. have all put their IPO plans on hold amid an uncertain listing environment.