Meesho, a leading e-commerce platform in India, has raised $275 million in a fresh investment round, potentially reaching above $500 million.
Meesho, a well-known e-commerce firm in India with over 150 million active users, announced in a securities filing that it had raised $275 million in a fresh investment round.
According to people familiar with the situation, the fresh cash is part of a broader financing round that might include secondary deals and reach above $500 million.
According to those who requested anonymity, the current round values the Bengaluru-based social commerce platform firm at approximately $3.9 billion, as talks are still ongoing. In September 2021, the business secured a valuation of $4.9 billion. To date, it has raised more than $1.2 billion.
A few investors, such as Norwest Venture Partners and WestBridge Capital, have attempted to invest in Meesho. Venture Highway, an early supporter, sold Meesho shares to WestBridge last year. Among its investors are Meta, Fidelity, Peak XV, Prosus Ventures, B Capital, and SoftBank.
Meesho is one of the nation’s e-commerce firms with the quickest rate of growth. Earlier this year, Bernstein analysts assessed its run-rate GMV to be over $5 billion.
Meesho’s selection of goods has attracted value-conscious Indians due to its affordable prices, variety, and lack of branding. A large portion of India’s consumer class consists of low- to mid-income consumers, and the startup’s value offer seems to be hitting home with them.
In a recent note to its investors, Jefferies stated that Meesho has one of the biggest assortments of items across platforms, responding to the diverse and heterogeneous preferences of the Indian market, with over 120 million listings and 440,000 annual transacting vendors.
Average order values (AOVs) on traditional e-commerce platforms in India have been well over ₹1,000 (about $12) due to the platforms’ primary concentration on branded suppliers and high-income clients. Their AOV, however, is typically less than ₹350.
Their algorithm prioritizes items based on a variety of indicators such as seller and product ratings, customer reviews, past shopping behavior, and product popularity. Therefore, analysts at Jefferies assert that price influences the marketability of a product listing.
“Compared to competitors, Meesho’s fulfillment charges are significantly lower than peers, enabling the platform to offer lower prices to customers.” To reduce expenses, Meesho outsources the distribution and uses an asset-light methodology. According to the Jefferies note, Meesho ships about half of India’s yearly 3PL e-logistics shipments.
However, the competition is intensifying. Recently, Amazon India opened Bazaar, a “special store” with reasonably priced, stylish apparel and lifestyle items.