Fidelity has reduced the value of its stake in Meesho by 33.6% since the original investment, giving the Indian social commerce startup a valuation of $3.5 billion, adjusting for shares outstanding.
The US asset manager valued its stake in Meesho at $27.8 million at the end of December, down from the $41.9 million it invested in the second half of 2022 through a specific mutual fund unit. Fidelity revealed the reduction in its monthly statement Monday afternoon.
Fidelity lowered Mishu’s valuation to $4.1 billion at the end of October. The startup was valued at $4.9 billion in its previous funding. The valuation adjustment comes on the heels of a secondary sale late last year when early backer Venture Highway sold some of its shares in Meesho to WestBridge Capital, TechCrunch first reported. That sale valued Meesho at $3.5 billion, a factor that may have contributed to Fidelity’s valuation.
In a statement to TechCrunch, a Meesho spokesperson said: “The funds attribute value to their portfolio investments, taking into account various factors such as the valuation of similar companies. Based on Fidelity’s filings, the number of shares held and the current number of total fully diluted shares, the valuation is estimated at 3.5 $1 billion.An increase in the number of shares outstanding, particularly due to the expansion of the ESOP pool, could have contributed to this shift in valuation.
Meanwhile, Fidelity slightly increased the value of its holdings in Reddit, Gupshup and X, according to the monthly filing. All of these startups remain well below their original investment dollars.
Meesho – which counts Meta, Peak XV, Prosus Ventures, B Capital and SoftBank among its backers – runs a social commerce startup that is among the fastest growing e-commerce startups in the country. Its current GMV run is more than $5 billion, AllianceBernstein reported earlier this month. It is also looking to expand into new areas, where it plans to build a financial services platform and expand its grocery delivery business, Indian daily Economic Times reported. reported Tuesday.
More than 50% of Meesho’s sales come from tier 2 and below cities, allowing it to target a demographic that Flipkart and Amazon have been effectively ignoring so far. Meesho’s strategic prioritization of small cities and focus on its mass market and value-conscious customer base is paying off, according to AllianceBernstein.