Valuation Slashed: Gupshup, SaaS Unicorn, Faces Significant Decrease as Fidelity Cuts Stake Value by 31.6%
- ByStartupStory | June 1, 2023
Gupshup, a SaaS unicorn, has experienced a significant decrease in valuation as Fidelity Investments, an AMC based in the US, has slashed its value by 31.6%. The valuation markdown was reflected in regulatory filings submitted to the SEC, wherein Fidelity Central Investment Portfolio LLC, holding a stake in Gupshup Inc’s parent company, adjusted the fair value of its stake downward by 31.6% as of March 31, 2023.
Fidelity, through Fidelity Central Investment Portfolio LLC, currently owns 44,950 shares in Gupshup, a Mumbai-based startup. The AMC initially valued these shares at nearly $1.03 million as of June 30, 2021, shortly after making the investment. However, in the most recent valuation update, Fidelity has marked down the fair value of its stake to approximately $703,000. Additionally, Fidelity holds 59,838 shares in Gupshup through its Variable Insurance Products Fund III. The value of these shares was previously estimated at $1.37 million as of June 30, 2021, but the latest update indicates a fair value of just over $935,000.
Following the valuation markdown, Gupshup, the SaaS unicorn, is now valued at approximately $957 million. This valuation is derived from its previous valuation of $1.4 billion during its Series F funding round of $100 million in April 2021. The markdown in valuation comes in light of a 24% year-on-year decline in net profits, amounting to INR 39.9 crore. However, the company’s operating revenue witnessed a significant increase, jumping 1.5 times year-on-year to INR 1,132 crore.
Established in 2004 by Beerud Sheth, Gupshup is a conversational messaging platform that specializes in enhancing customer experience for businesses. The company prides itself on facilitating over 7 billion messages every month, enabling seamless conversations with customers. Gupshup boasts a prestigious client base that includes prominent Indian banks and unicorns.
Amid ongoing global macroeconomic challenges, Indian unicorns have experienced a series of valuation markdowns. Fidelity reduced Meesho’s valuation by approximately 10% to $4.4 billion on May 30th, while BlackRock slashed BYJU’S valuation to $8.3 billion on the same day.
Recently, there have been several valuation markdowns among Indian unicorns by various investment firms. The Private Shares Fund lowered Eruditus’ valuation to $2.9 billion, while Baron Capital reduced Swiggy’s valuation to $6.5 billion. Janus Henderson and Neuberger Berman also made valuation cuts for PharmEasy on separate occasions. Invesco made two valuation cuts for Swiggy within the last two months. Interestingly, Neuberger Berman, an investor in Gupshup, did not reduce the SaaS unicorn’s valuation. However, they did slash Pine Labs’ valuation in May. Additionally, Ola experienced a valuation markdown of 35% by Vanguard in May.
It is important to recognize that fair value updates from investors are a routine occurrence and are subject to the investor’s internal policies. These updates in fair value do not necessarily indicate a permanent valuation markdown. For example, even though BYJU’S had its fair value reduced to $8.3 billion by BlackRock, the edtech company continues to raise funds at a valuation of $22 billion.
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