HSBC cuts E-commerce Unicorn ElasticRun's valuation to $800 million
In a recent round of valuation, HSBC has remarkably reduced the its valuation estimate for the Pune-based B2B ecommerce startup Elastic Run from $1.5 billion to $800 million.
This reduction in the valuation pushed down the company below the $1-billion ‘unicorn’ mark. This change unveiled a broader trend in the valuation of startups, as investors reassess the worth of their portfolios amid challenging market conditions.
Before this, HSBC marked Dutch-listed Prosus' nearly 10% stake in Byju's as zero due to a deepening cash crunch and ongoing legal battles.
The startup Elastic Run was started in 2016 by Sandeep Deshmukh, Shitiz Bansal, and Saurabh Nigam. The startup works with various FMGC brands to extend their reach in rural markets.The startup extracts their products from FMCG companies and sells them to local retail stores in rural areas.
Besides, this core business, it also offers logistics and warehousing services and offers lending services through its logistics network across the country.
Due to the company’s financial crunch, they had to face this lowered valuation. The net loss of the startup increased by 72% in FY23, reaching 
618 crore due to high expenses and employee costs. These financial challenges have made it difficult for Elastic Run to maintain its previous valuation levels.
618 crore due to high expenses and employee costs. These financial challenges have made it difficult for Elastic Run to maintain its previous valuation levels.
On May 21, HSBC's research note provided updated valuation estimates for several Indian startups. Meesho, a retailer, saw a decrease of 14% in its valuation estimate, now valued at $2.5 billion. Similarly, Dehaat, an agritech firm, had its valuation estimate reduced by 11% to $400 million.
Nevertheless, Meesho is presently in the midst of a funding round worth $600 million, with the potential to conclude at a valuation of $4 billion. These regular assessments are carried out by leading brokerages and provide insights into the current market sentiment and financial well-being of these corporations
