Fidelity marks down Gupshup's stake, implies sharp valuation drop

Fidelity cuts Gupshup's implied valuation to $280-300 million from $1.4 billion, reflecting steep markdown amid slowdown and business challenges

A fund run by the US-based asset manager Fidelity Investments has sharply reduced the value of its stake in conversational AI startup Gupshup, according to its latest monthly disclosure.

 

The revised carrying value implies a valuation of roughly $280 million to $300 million for Gupshup, a drop of about 80 per cent from its earlier unicorn status.

 

The San Francisco-based company was valued at $1.4 billion when Fidelity first invested in the company in 2021 through a secondary transaction.

 

The asset manager has been revising the value of its holding and had lowered it to roughly $697 million as of July 2023.

 

Last year, Gupshup raised over $60 million in a funding round combining equity and debt financing from Globespan Capital Partners and EvolutionX Debt Capital.

 

The firm had planned to use the funding for expansion of its conversational AI and messaging platform, and accelerate go-to-market execution across high-growth markets, including India, the Middle East, Latin America, and Africa.

 

Founded in 2004, Gupshup sells messaging APIs and conversational tools, and has more recently pivoted towards AI-driven customer engagement. The company has faced business churn in recent years, cutting about 300 jobs after a period of rapid expansion.

 

For fiscal 2025, its India unit — its largest market, contributing roughly 60 per cent of revenue — posted a 5 per cent decline in revenue to ₹1,943 crore, while net profit fell 52 per cent to ₹26 crore. The remaining 40 per cent of revenue comes from overseas markets. About 60 per cent of its clients are large enterprises across sectors including ecommerce, fintech and banking.