The fair value of social commerce startup Meesho has been reduced by 10% in Fidelity Investments’ books, making it the most recent US-based asset management company (AMC) to do so in the midst of a difficult macroeconomic environment.
Fidelity Investments has stakes in Meesho Inc., the holding company for the social commerce unicorn with headquarters in Bengaluru through a number of funds. The US-based AMC reduced the fair value of Meesho by 9.7%, according to the most recent filings of these funds, including Variable Insurance Products Fund III and IV and Fidelity Central Investments Portfolio LLC. The company is now valued at $4.4 billion as a result.
The social commerce startup is the most recent Indian unicorn to see its fair value decline. The fair values of other well-known startups, including Ola, Swiggy, Eruditus, and Byju’s, have also been decreased by US-based AMCs. The reductions for Eruditus and Meesho, however, are considerably less than those for Ola, Byju’s, and Swiggy, which have been reduced by between 30% and 50%.
It is crucial to remember that these fair value adjustments are frequently based on AMC’s internal analysis of the macro and microenvironment. They don’t necessarily mean that the startup’s overall valuation has been permanently reduced.
In September 2021, as part of Meesho’s Series F funding round, Fidelity and Facebook co-founder Eduardo Saverin’s B Capital Group led a sizable $570 million funding round. Meesho was valued at $4.9 billion by the funding, making it one of India’s largest unicorns.
Meesho, like most other startups, has been actively reducing costs since the beginning of last year in an effort to lower its monthly burn in the face of a deteriorating macroeconomic environment. The SoftBank-funded business had previously come under fire for having a high burn rate.
Since 2022, Meesho has rebranded its grocery division and laid off 500 employees in an effort to cut down on burn. As per the reports from earlier this month, Meesho has decreased its monthly burn from approximately $40-45 million during the peak of Covid in 2021 to $4-5 million.
