SaaS Giant Postman Faces 30-40% Valuation Cut in Latest Secondary Deals

In a surprising turn of events, SaaS platform Postman, once valued at $5.6 billion (INR 46,925 crore), has recently engaged in secondary deals at a significant 30-40% discount from its peak valuation. This sharp decline has raised eyebrows and brought attention to the broader struggles within the SaaS sector.

Postman's Valuation Plunge

Typically, secondary deals are executed at a 10-15% discount from the last primary valuation. However, Postman’s steep discount highlights a troubling trend for SaaS firms, indicating a decline in value based on revenue multiples. Multiple sources confirm that angel and early investors have partially exited their stakes in the Bengaluru-based company during these rounds.

A Brief Overview of Postman

Founded in 2014 by Abhijit Kane, Abhinav Asthana, and Ankit Sobti, Postman specializes in the enterprise tech sector, offering robust API (Application Programming Interface) tools. With plans starting at $14 per month, Postman provides essential services to its clients.

In 2021, the company raised $225 million in a Series D funding round led by Insight Partners, Coatue, Battery Ventures, and Bond. This round nearly tripled its valuation to $5.6 billion from an initial $2 billion, with contributions from CRV, Nexus Ventures, DoorDash product leader Gokul Rajaram, and Freshworks' Girish Mathrubootham. To date, Postman has secured over $430 million in total funding.

The Golden Year: 2021

The year 2021 was a remarkable period for Indian startups, with global investors pouring in $42 billion, resulting in the creation of a record 44 unicorns, according to Inc42’s report. Postman was among the many beneficiaries of this investment boom.

The Broader Trend of Valuation Cuts

However, the enthusiasm has waned. Major valuation cuts have impacted prominent Indian unicorns like BYJU’S, Meesho, and PharmEasy. For instance, Fidelity slashed Meesho’s valuation by 29% to $3.5 billion in January 2023. Vanguard reduced Ola Cabs' valuation by 29% to $1.88 billion in February 2023, a stark drop from its peak valuation of $7.3 billion.

Recent Valuation Markdowns

The trend of markdowns continued with US-based fund manager Invesco. In an SEC filing, Invesco marked down Swiggy’s valuation by 3% to $12.3 billion and Pine Labs' valuation by 8.5% to $3.5 billion at the end of April 2024.

The significant markdown in Postman’s valuation, along with similar trends in other high-profile startups, signals a shift in investor sentiment. The once bullish outlook on SaaS and tech startups is facing reality checks as market conditions evolve. Investors are now more cautious, focusing on sustainable growth and profitability over rapid expansion and sky-high valuations.