New Delhi: US-based asset management company Fidelity Investments has reduced the fair value of Indian unicorn Gupshup by 31 percent as of March 31, 2023. Fidelity Investments holds stakes in Gupshup Inc, the holding company of the cloud-based chat development platform, through multiple funds. The latest SEC filings of these funds, such as Variable Insurance Products Fund III and Fidelity Central Investments Portfolio LLC, reveal the markdown in the fair value, which now values Gupshup at $957 million, down from $1.4 billion.
However, Neuberger Berman, another investor in Gupshup, has not made any adjustment to the company’s fair value. Gupshup has maintained high growth and profitability since its funding round in 2021, according to Beerud Sheth, the Co-founder and CEO of Gupshup. The valuation marks of illiquid securities are made by each investor fund based on internal policies.
Gupshup is not the only Indian unicorn to experience a reduction in its fair value. Other prominent startups like Meesho, Ola, Swiggy, Eruditus, and Byju’s have also seen their fair values decreased by US-based asset management companies. While Meesho and Eruditus faced markdowns of 9-10 percent, the rest experienced more significant reductions, ranging from 30 to 50 percent.
It is crucial to understand that these adjustments to fair values are typically based on the asset management companies’ internal assessment of the macro and microenvironment. They do not necessarily indicate a permanent decline in the overall valuation of the startups.
Gupshup, founded by Beerud Sheth almost two decades ago, provides cloud-based chatbot services to over 45,000 businesses across various sectors, including BFSI, e-commerce, retail, travel, edtech, and healthcare. The company serves customers in India, Latin America, Europe, Southeast Asia, the Middle East, and the United States. Earlier this year, Gupshup launched an advanced conversational chatbot tool using OpenAI’s GPT-3 technology for enterprise applications.
So far, Gupshup has raised more than $380 million from investors such as Tiger Global, White Oak, Malabar Investments, and Helion Venture Partners. The company’s revenue grew 1.5 times in FY22 (2021-22) to Rs 1,132 crore, but its profit narrowed to Rs 39.9 crore from Rs 52.5 crore in the previous year. Gupshup generates revenue primarily through mobile messaging services and advertisements.
