T Rowe cuts valuation of Uber, Airbnb, Flipkart, Dropbox, and others

Photo credit: Purple Slog

Mutual fund T Rowe Price has cut back its valuations in most of its tech startup investments, including Uber, Dropbox, and Flipkart, according to its filings.

In all, the fund knocked down values its holdings in 12 companies valued at $1 billion or more, while it increased values in four.

This is the second time in less than two months that a big-name investor has taken the axe to top tech unicorns of the world. Morgan Stanley beat down some of its investments in February.

Among well known names that saw the most drastic cuts then were Twitter, Yelp, Flipkart, and Dropbox, in which Morgan Stanley wrote down their prices-per-share by between 23 and 36 percent in one quarter.

These reports are watched closely by the startup industry across the world because they are considered to be important measures of how investors value startup stocks.

The fund put out its first markdowns for Uber and Airbnb by 6 percent each, while Flipkart was cut back by 15 percent. Dropbox was cut by 16 percent in the quarter, reports said.

“The first quarter was an extremely volatile period for global equity markets,” a T Rowe Price spokesperson told the Wall Street Journal.

“In determining fair values for our private investments, we continued to follow our long-established process of considering a variety of company-specific and market-based factors,” he told the paper.

On Friday, T Rowe Price’s biggest Q1 markdown of unicorns included enterprise-software company Cloudera Inc, whose valuation was cut 37 percent, the Journal said. Database-software firm MongoDB was down 23 percent and Evernote down 21 percent.

See: Why flipkart’s valuation knockdown isn’t such a bad thing

Flipkart’s woes

Flipkart cofounders Sachin Bansal and Binny Bansal. Photo credit: LetsIntern.

T Rowe’s markdown would imply that it values Flipkart, India’s biggest startup, at US$12.75 billion. The company was valued at US$15 billion when it last raised US$700 million from Tiger Global Management and other existing investors in June 2015.