Indian e-commerce platform, Meesho is set to expand its ongoing funding round with several venture capital (VC) firms expressing strong interest in the company. This move comes following earlier reports of USD 300 million investment from major players including Tiger Global, Peak XV Partners and SoftBank.
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Potential Increase in Round Size
Media Sources indicate a possible increase in the size of the round, with estimates ranging from USD 500 to USD 650 million. The primary capital, approximately USD 300 Million, is earmarked for tax obligations associated with the company’s relocation from Delaware back to India, while the remainder constitutes the secondary component.
Discussions among investors are ongoing to determine the allocation of funds. While Tiger Global and Peak XV lead the round, others such as SoftBank, Westbridge Capital, and Marks Growth Capital are reportedly participating.
Financial Performance
Founded in 2015 by Vidit Atrey and Sanjeev Barnwal, Meesho has demonstrated significant financial progress. The company reported monthly profits of INR 4 to 5 Cr in July 2023 and achieved profitability since then. In FY23, Meesho halved its losses to INR 1675 Cr while witnessing a 77% growth in revenue from operations.
Notable Investor Engagements
Meesho has entered into negotiations with Accel, which has not yet reached a partnership agreement. Apart from the latest angle to this story via Accel, an early-stage investor in Meesho’s rival company Flipkart, it is a second case of Flipkart backers showing interest in Meesho.
Valuation and Stake Dilution
The current valuation of Meesho is USD 3.9 Billion, down 20% from the previous valuation of USD 4.9 Billion in 2021, Early backers including Venture Highway and Meta (Formerly Facebook) are expected to reduce their stake as part of the funding.
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Strategic Objectives
Meesho’s latest fundraising efforts align with its strategic objectives, which also include potential acquisitions to diversify its business. The company aims to expand its customer base across various categories ranging from groceries to electronics, although specific targets have not been identified yet. With increasing investor interest and improving financial performance, Meesho is poised for further growth and innovation in the competitive market.
