Fidelity lowers meta-based Meesho valuation to $3.5 billion | Tech Crunch

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Fidelity trimmed its holding in Meesho by 33.6% from the original investment, valuing the Indian social commerce startup at $3.5 billion, adjusted for outstanding shares.

US asset manager Meesho valued its holding at $27.8 million at the end of December, down from $41.9 million invested in the second half of 2022 by a certain mutual fund unit. Fidelity disclosed the markdown in its monthly disclosure on Monday afternoon.

Fidelity valued Meesho at $4.1 billion at the end of October. The startup was valued at $4.9 billion in its previous funding. The valuation adjustment follows a secondary sale transaction late last year when Venture Highway sold a portion of its equity 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: “Funds attribute value to their portfolio investments, taking into account various factors such as the valuation of comparable companies. Based on Fidelity's filings, the number of shares held and total fully diluted shares outstanding, the valuation is estimated at $3.5 billion. An increase in the number of shares outstanding, particularly due to the expansion of the ESOP pool, may have contributed to this valuation change.

At the same time, Fidelity saw its holdings in Reddit, Gupshup and X rise slightly, according to monthly disclosures. All of these startups are far below their original investment dollars.

Meesho — which counts Meta, Peak XV, Process Ventures, B Capital and SoftBank among its backers — operates a social commerce startup and is one of the fastest-growing e-commerce startups in the country. Its current GMV run rate is more than $5 billion, AllianceBernstein reported earlier this month. It is also looking to expand into new areas — planning to build a financial services platform and scale its grocery delivery business, Indian Daily Economic Times reported on Tuesday.

50% of Meesho's sales come from Tier 2 and below cities, allowing it to effectively target a demographic that has been largely overlooked by Flipkart and Amazon so far. Meesho's strategic preference for small towns and focus on a mass-market, value-oriented customer base is paying dividends, according to AllianceBernstein.

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