The big tech companies of our time are being cut down to size.

Snapchat, the messaging service with 100 million daily active users, and which rejected a Facebook takeover in the past, is the latest technology company to see its lofty valuation start to disappear.

Fidelity, a mutual fund that invested in Snapchat as part of a more than $500 million Series F round of fundraising earlier this year, has quietly marked down the value of its stake in the company by about 25% in the most recent quarter, according to quarterly portfolio holdings reports filed with the Securities and Exchange Commission.

The markdown means that Fidelity believes the value of its stake in Snapchat has fallen sharply, although it's not clear what prompted Fidelity to realize that. Usually, that can happen when new investors come in or when the company reprices stock options for its employees.

At the time of the Fidelity investment, Snapchat was said to be valued at a jaw-dropping $16 billion. Now it's only worth $12 billion, at least in the eyes of Fidelity.

Evan Spiegel, the CEO of Snapchat. Image: Jae C. Hong/Associated Press

Of course, it's all paper money at the moment, but the size of Fidelity's writedown is a big shock for a company that, until now, seemed only to be rising in value.

Mary Ritti, a spokesperson for Snapchat, declined to comment on the report. Charles Keller, a spokesperson for Fidelity Investments, said the firm does not comment on individual companies in its portfolio. The Financial Times and Morningstar were first to report the valuation news.

so i guess fidelity's valuation of its stake in snapchat was .... ........ ephemeral — Matthew Zeitlin (@MattZeitlin) November 10, 2015

Twilight of the tech 'unicorns'

Snapchat is just the latest prominent billion-dollar technology company to see its valuation questioned by investors. Square, reportedly valued at $6 billion on the private markets one year ago, filed to go public this month with a valuation of just $4 billion.

Dropbox, which has been sitting on a $10 billion valuation for nearly two years, has been told it too will need to cut that down if it wants to go public.

"[Snapchat] is just one of many indicators that the overall market assessment of technology companies has adjusted, in terms of valuation," says Harry Weller, a general partner at venture capital firm NEA, which has invested in Uber among other highly valued startups. "I think that people have already felt it."

Dropbox CEO Drew Houston speaks at the company's Dropbox Open event in San Francisco November 4, 2015. Image: Mashable/Karissa Bell

Weller says that beginning this summer, private and public investors began to reassess just how much some of these startups are really worth.

That shift coincided with broader instability in the market from concerns about China's economy slowing down and a looking interest rate hike by the Federal Reserve, as well as worries at the time that Greece could fail to get a bailout.

The era of free money and wild expectations appears to be ending, for now. Some startup founders have already been thinking of their "plan B," setting aside money to survive a tech winter.

Both public companies — those with shares listed on a stock exchange like the New York Stock Exchange or Nasdaq — and private companies — those who have sold shares to private investors, which can include venture capitalists or wealthy individuals — have seen their value fall.

The Facebook comparison

Public technology companies like Twitter, LinkedIn and Yelp, once fawned over by Wall Street for having seemingly endless user and revenue growth potential, were instead scrutinized and pummeled by investors tired of waiting for growth and lowering their expectations.

That has gradually been mirrored in the private markets too, where businesses are typically measured against their public counterparts.

Twitter, for example, was initially valued in the tens of billions when it went public in part because investors compared it to already-public Facebook, which was worth even more.

Facebook CEO Mark Zuckerberg, the man many want to be. Image: ASSOCIATED PRESS/Associated Press

Snapchat, too, has been compared to Facebook by investors — but also to media companies more broadly, which is part of the reason industry watchers believe its valuation has been hurt. Media companies as a whole have taken a beating in recent months.

"When you look at these emerging media platforms, a public facing investor might look at the media stocks that have been trading down recently and use that as a reference point and think the valuation is now lower," says Daniel O'Keefe, general partner at venture capital firm Technology Crossover Ventures. "In reality, it's these emerging platforms that are the exact reason why those public companies are down.”

Fidelity is, of course, just one investor — but it happens to be a large one that has helped perpetuate the surge in private valuations with sizable investments in billion-dollar startups like Pinterest, Blue Apron and Uber.

Many analysts and venture capitalists have been anticipating down rounds — raising money at a lower valuation than the last round of funding — for months, but a change in thinking from firms like Fidelity could potentially impact the biggest names in tech.

Weller, who admits to some bias as an investor in some of these businesses, believes any change in valuation to Snapchat or Uber is just temporary thanks to their "Facebook-like" business models. There's certainly a lot of money riding on him being right.

"I am not saying that all these companies that are overvalued deserve to be. There's a hell of a lot of pretenders," he says. "But the intrinsic valuation creation machine that might be a Snapchat or an Uber will ultimately catch back up to or surpass that valuation adjustment."