Fidelity Investments, a major investor in Indian startups, has marked down the fair value of ecommerce platform Meesho by 9.7%. The Bengaluru-based startup, which entered the unicorn club in 2021, has seen its valuation cut to $4 billion after the markdown. Fidelity Investments holds 32,220 shares in Meesho, valued at $2.29 million.
Meesho, founded in 2015 by Vidit Aatrey and Sanjeev Barnwal, has raised close to $1 billion from prominent investors such as Sequoia Capital, SoftBank, Prosus & Naspers, and Meta (formerly Facebook). However, the company has faced challenges recently, with losses increasing sixfold in FY22. While its revenue saw a significant jump of 300% to INR 3,359.4 crore, losses reached INR 3,247.8 crore, prompting the company to lay off over 700 employees in multiple cycles.
In addition to financial difficulties, Meesho has been embroiled in controversies, including seller discontent over its return policy and allegations of unfair trade practices. Last month, an Ahmedabad-based seller sent a legal notice to Meesho, accusing the platform of unfair trade practices. The notice cited numerous instances of return requests from customers claiming damaged or wrong products.
Meesho is not the only Indian unicorn facing valuation markdowns. Other prominent startups like BYJU’S, Pharmeasy, Ola, and PineLabs have also experienced similar downgrades in their valuations in recent months. The trend reflects the cautious approach of investors and the challenges faced by Indian startups in achieving sustainable growth and profitability in highly competitive markets.
