Fidelity Marks Down Dropbox, Zenefits

Fidelity Investments again took a hatchet to the valuations of its private technology shares in February, cutting bellwether software startups like Dropbox Inc., Cloudera Inc. and Zenefits by as much as 38%.

On Wednesday the mutual fund giant posted valuation estimates as of Feb. 29 for the holdings in its various mutual funds. The reports are closely watched in Silicon Valley since they offer among the few public gauges for how startup values are trending.

Unlike its quarterly filings, Fidelity's monthly reports don't disclose the number of shares it holds in each company, only the total value of holdings. It is possible that valuation declines could be explained by share sales; however, Fidelity hasn't typically sold any shares of its private tech holdings.

The Wall Street Journal last month published the Startup Stock Tracker, which keeps tabs of valuations posted by multiple mutual fund firms. The interactive has been updated to show February marks posted by Hartford Funds and Principal Funds in addition to Fidelity.

The largest Fidelity markdown was enterprise-software company Cloudera, which Fidelity cut by 38% compared with January to a per-share price that is in line with other mutual fund marks for the company.

Other big markdowns include business software company Domo Inc., down 29%, the first big decline for that company; Web storage firm Dropbox, down another 20% to a level that all but wipes out the gains on Fidelity's 2012 investment in the company; and health-benefits broker Zenefits, down 25% and now 65% below Fidelity's May 2015 purchase price. Electronic-document software firm DocuSign Inc. was reduced 34%, though Fidelity still shows a 170% paper gain.

Fidelity marked down the values of 12 startups tracked by the Journal in February. The write-downs may have been expected after an early February swoon for public technology shares like LinkedIn Corp. and Tableau Software Inc. Yet the technology-heavy Nasdaq Composite Index made a strong comeback during the month, recovering some of its losses.

Fidelity did lift the valuation of at least four companies during the month, including room-sharing website Airbnb Inc. and prepared-meals company Blue Apron Inc., both up 14%; baby-products retailer Honest Co., up 12.7%; and rocket maker Space Exploration Technologies Ltd., up 8.3%.

Messaging company Snapchat Inc. got a vote of confidence from Fidelity in February when the mutual fund company invested $175 million at a valuation that was in line with the fund's investment in the company last March. The exact per-share price isn't clear because Fidelity didn't disclose the new number of shares it held.

Write to Rolfe Winkler at rolfe.winkler@wsj.com

(END) Dow Jones Newswires

March 30, 2016 10:45 ET (14:45 GMT)

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