An investor has shredded the value of its stake in Dropbox, Cloudera and other billion-dollar startups

Investor T. Rowe Price just marked down its holdings in a bunch of hot tech startups, another indication that last year's sky-high billion-dollar valuations for startups are falling back to earth.

The mutual fund manager took a particular ax to Dropbox, valuing the company at $7.91 per share, reports Alfred Lee at The Information.

That's a 59% cut over what investors paid for a round in 2014 which valued the privately held company at $10 billion. But it's even lower than what they paid back in 2011 ($9.05/share), Lee reports.

T. Rowe also marked down:

• Cloudera by 37%,
• MongoDB by 23%,
• Lookout by 16%,
• Flipkart by 15%,
• Apptio by 15%,
• Houzz by 12%
• and Warby Parker by 11%
• and others.

Uber, the $62 billion ride-hailing startup, and home-sharing service Airbnb both got a 6% valuation haircut.

And T. Rowe took a heavy axe to its common stock Series 1 investment in Evernote, cutting that by 75%, although it did not mark down the value of its later rounds in Evernote, Lee notes.

The markdown to Evernote is interesting.

In many cases, the terms investors were offering startups in rounds that gave them such high billion-dollar valuations included extra protections for the investors and their preferred stock if it looked like they could lose money in future future fund-raising or cash-out events, like an IPO. In other words, there may be less reason to write-down certain preferred stock, since the risk of losing money is much lower.

Mutual funds are very opaque about the methodology that they use to value private startups, and recently there have been some arguments that the significance of the mark downs has been overstated.

Indeed, other mutual fund investors have rated their investments in these same startups differently.

For instance, look at the variations from 4Q 2013 to 1Q 2016, according to the by Wall Street Journal:

• Dropbox: collectively up 17.31% by all the mutual funds tracked, with the lowest price in that period again from T. Rowe Price at $9.40.
• Cloudera: up 54% (although Fidelity recently marked down Cloudera, too), with the lowest price $19.50 from Hartford and Principal.
• MongoDB: down 32.83%, lowest price from Fidelity at $5.75.
• Lookout: down 9%, lowest price from Hartford $8.35.
• Flipkart: up 6.22%, lowest price $100.99 from Principal
• Evernote: down 36%, from T.Row Price's last markdown in December to $7.66

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