US-based asset manager Fidelity Investments has cut the value of its holding in conversational AI firm Gupshup by nearly 80% from its 2021 entry level, reflecting a sharp reset in valuations of software startups.
Fidelity now values its stake in Gupshup at $3.48 million as of February, down from $16.2 million invested in July 2021. The investment is through its Fidelity Blue Chip Growth Fund. The markdown implies an overall valuation of about $300 million for Gupshup, compared with $1.4 billion at the time of Fidelity’s investment through a secondary transaction.
The fund has been reducing the carrying value of its stake over successive disclosures. Earlier in 2024, it had valued its roughly 700,000 shares in the company at $5.6 million.
Financial Pressures
Operationally, Gupshup has reported a mixed performance. Revenue from operations declined 5% year-on-year to Rs 1,943 crore in FY25, while profit fell to Rs 26 crore from Rs 54 crore in the previous year, indicating pressure on margins even as the company continues to scale its messaging and AI-led offerings.
Gupshup provides conversational engagement tools for enterprises across channels such as WhatsApp, SMS and voice, using AI-driven chatbots.
Commenting earlier on valuation cuts, Co-founder and CEO Beerud Sheth had said such markdowns reflect external estimates rather than underlying business performance. “Valuation is ultimately an opinion unless validated by a real transaction. The true value of a company is determined when a willing buyer and seller agree on a price,” he told FE in an interview in March 2025.
Market Correction
The markdown comes in the context of a broader correction in technology valuations after the surge seen in 2021, when software companies attracted significant investor interest. Gupshup had raised $340 million in two tranches in 2021 from investors, including Tiger Global, Think Investments and Malabar Investments, and became a unicorn. It subsequently raised another $100 million in 2022.
In total, the company has raised about $546 million across nine funding rounds, according to Tracxn data.