Fidelity’s Market Valuation of Privately-Held Startups
As the public market continues to experience a slowdown, investors are reevaluating their stakes in privately-held startups. One of the world’s largest asset managers, Fidelity, has further reduced its estimated value of holdings in social platform Reddit and chat app Discord, as well as SaaS startup Gupshup. This development provides insight into how major investors perceive the impact of the ongoing market downturn on privately-held companies.
Reddit Valuation Slides by 45.4%
According to Fidelity’s Blue Chip Growth Fund’s monthly disclosure released Friday, its holdings in Reddit were valued at $15.4 million as of May 31. This represents a 7.36% decline from the $16.6 million mark at April’s closure and a cumulative slide of 45.4% since its investment in August 2021. The updated share value suggests a $5.5 billion valuation for Reddit.
Discord Valuation Down by 47%
Fidelity has also marked down the value of its Discord holding to $1.7 million, down 13.4% from a month ago and 47% since the initial investment in September 2021 (worth noting that the majority of markdown in the value of Reddit and Discord holdings by Fidelity predominantly occurred last year). The social media giant raised funding in August 2021 at a valuation of $10 billion, while Discord was valued at $15 billion when it attracted funds in September 2021.
Twitter Valuation Remains Below Initial Investment
The financial giant has also reevaluated the value of its holding in Twitter to $6.86 million, up from $6.55 million from a month prior but still down 65% since the original investment. This trend is evident in Fidelity’s decision to reduce its stake in SaaS startup Gupshup to $10.15 million, down from $11 million at April’s closure and 38% since the initial investment.
Market Downturn and Its Impact on Privately-Held Startups
The ongoing slowdown in the public market is forcing investors to reassess their stakes in privately-held startups. As the market continues to experience volatility, it remains to be seen how Fidelity’s holdings will evolve in the coming months. This development highlights the challenges faced by investors and startups alike as they navigate the current economic landscape.
Related Topics
- Discord
- Elon Musk
- Fidelity
- Gupshup
- Startups
- Venture Capital
About the Author
Manish Singh is a senior reporter at TechCrunch, covering India’s startup scene and venture capital investments. Before joining TechCrunch in 2019, Singh wrote for about a dozen publications, including CNBC and VentureBeat. He graduated in Computer Science and Engineering in 2015.
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