In a recent development, Fidelity Investments has reduced its valuation of Indian e-commerce startup Meesho by nearly 10%. The move comes as part of a wider trend of investors marking down the valuations of companies in the Indian startup ecosystem.
Notably, Fidelity's funds had valued Meesho at $4.98 billion as of December 2022. Prior to that, as of September 2022, the investor had valued the company at $5.5 billion. The latest mark-down means that Meesho is now valued at around $4.5 billion.
Meesho is one of India's largest social commerce platforms, allowing individuals to sell products to their contacts on social media platforms such as WhatsApp and Facebook. The company has raised over $1 billion in funding to date and was last valued at $6 billion in August 2021.
The mark-down of Meesho's valuation by Fidelity Investments follows similar moves by other investors in the Indian startup ecosystem. For example, SoftBank marked down the valuations of its investments in Indian companies Oyo Rooms and Paytm in 2021.
The mark-downs have been attributed to a range of factors, including increased competition in the Indian market, regulatory challenges, and a general cooling of investor sentiment towards the country's startup ecosystem.
Despite the mark-down, Meesho remains a significant player in the Indian e-commerce market. The company has over 13 million registered users and has reported strong revenue growth in recent years.
Fidelity Investments is one of the world's largest asset managers, with over $4.9 trillion in assets under management. The company has a significant presence in the Indian market, with investments in a range of companies across sectors such as e-commerce, fintech, and healthcare.
In addition to its investment in Meesho, Fidelity Investments recently launched a new exchange-traded fund (ETF) and ETF series in Canada. The products are designed to offer financial advisors and investors access to a range of Fidelity's actively managed strategies.
The launch of the new ETF products is part of Fidelity's broader push into the Canadian market. The company has been expanding its presence in the country in recent years, including through the acquisition of Toronto-based investment manager CI Financial in 2020.
Fidelity's mark-down of Meesho's valuation is unlikely to have a significant impact on the company's operations in the short term. However, it could make it more difficult for the company to raise funds in the future, as investors become more cautious about investing in the Indian startup ecosystem.
Overall, Fidelity's mark-down of Meesho's valuation highlights the challenges facing Indian startups in a rapidly evolving market. While the country's startup ecosystem remains vibrant and dynamic, investors are increasingly demanding in terms of the returns they expect to see on their investments.
Ticker: FNF, MEESHO, CI, OYO, PAYTM
