Fidelity reduced estimated value of Indian Meesho by one third

Fidelity reduced the value of its investment in Meesho by 33.6%, valuing the Indian social commerce startup at $3.25 billion. Meesho, ‘India’s Favorite One-stop Online Shop’, when accounting for outstanding shares, claims a valuation of $3.5 billion.

At the end of December, Fidelity estimated its investment in Meesho at $27.8 million, a decrease from the $41.9 million it initially invested in the second half of 2022 through a dedicated mutual fund unit. Fidelity revealed this markdown in its monthly disclosure on Monday afternoon.

In October, Fidelity reduced Meesho’s valuation to $4.1 billion, down from the previous funding valuation of $4.9 billion. This adjustment came after a secondary sale transaction in which Venture Highway, an early backer, sold some equity to WestBridge Capital, valuing Meesho at $3.5 billion. 

A spokesperson from Meesho mentioned that funds evaluate the worth of their portfolio investments, taking into account factors like the valuation of similar companies. According to Fidelity filings and considering the number of shares held and the total outstanding fully diluted shares, the valuation is determined to be $3.5 billion. The spokesperson suggested that the increase in outstanding shares, particularly due to the expansion of the ESOP pool, might have influenced this change in valuation.

At the same time, Fidelity has slightly increased the valuation of its investments in Reddit, Gupshup, and X, as per the monthly disclosure. However, it’s important to note that these startups still lag significantly behind their initial investment amounts.