Wednesday, November 18, 2015

Venture Capital--More Unicorns Not Worth Anywhere Near Their Purported Valuations: Both The Hartford and T. Rowe Price Cut Carrying Value

From Fortune:

Beyond Fidelity: Even More Mutual Fund Markdowns of Tech Startups
T. Rowe Price and The Hartford have marked down some of their privately-held tech investments. 
Fidelity Investments isn’t the only mutual fund manager that has marked down some of its privately-held tech investments, based on a Fortune review of funds managed by The Hartford and T. Rowe Price. This new data is likely to exacerbate Silicon Valley concerns about taking money from mutual funds, and further a growing belief that startup valuations are beginning to diverge, rather than all rising in lockstep. 
Unlike Fidelity, none of these other funds publish valuations on a monthly basis. But they do provide at least annual and semi-annual reports, usually including the number of shares acquired, when they were acquired, what was paid and present market value. 
For example, the $1.4 billion Hartford Growth Opportunities Fund reports that, though the end of June 2015, it was carrying preferred shares of 10 privately-held companies below its original cost bases. Among them was daily fantasy sports site DraftKings (shares acquired in Dec. 2014), which The Hartford marked down 10%—months before its recent regulatory troubles. 
Also marked down by 10% compared to cost were shares in Pinterest that The Hartford had acquired in March. It also reported a 7.12% markdown for shares of cybersecurity company Lookout, compared to the purchase price one year earlier. 
Then there was The Hartford’s investments in Docusign, which include five different classes of preferred stock. Four of those, all acquired in February 2014, are marked up. But the fifth, acquired in April 2015, is marked down 10%. Overall, the fund’s Docusign investment is up 23.4%. Pretty good, but it pales in comparison to the fund’s 130% mark-up for Uber shares it acquired in June 2014. 
Here is the full data-set from the Hartford Growth Opportunities Fund:...MORE
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Also at Fortune:
Fidelity Marks Down Even More Popular Tech Startups