The Bengaluru-based startup is reportedly preparing to debut an IPO of up to $606 million – its first. This would be a significant achievement as it will be India’s first big e-commerce IPO. Founded in 2015, Meesho is a social commerce marketplace. It has quickly evolved from a social commerce platform catering to first-time online shoppers through WhatsApp into a serious player in the Indian e-commerce landscape.
Meesho’s journey began with a focus on enabling individuals to sell products via social networks, capitalizing on India’s burgeoning internet penetration. The company runs a commission-light model, largely driving revenue by charging logistics fees, advertising, and other value-adds. It does take commissions on products sold through its Meesho Mall channel.
Over the last year, Meesho has seen phenomenal growth. Industry impacts By the end of 2021, the platform had 234.20 million transacting users and 706,471 annual transacting sellers. This growth reflects the increasing popularity of online shopping in India, particularly among new users navigating the digital marketplace for the first time.
The company announced huge financial numbers ahead of the IPO – a fait accompli. During the six-month period ending September 30, Meesho had an astounding revenue from operations of ₹55.78 billion, just over $624 million. This represents a 186% increase from ₹43.11 billion or roughly $482 million during the same period last year. On top of that, Meesho’s net merchandise value exploded 44% YoY to ₹191.94 billion (about $2.15 billion).
Meesho plans to sell its shares in a range of ₹105 to ₹111 per share. The company is planning to bring in ₹42.50 billion, or about $475 million, in new capital. After the issuance, the company’s post-issue valuation is expected to be approximately ₹501 billion (about $5.60 billion).
The public offering will include sell-downs of tokens from seed investors. At the same time, key investors like SoftBank and Prosus will take a pass on cashing out for now. This important decision highlights the conviction these investors have in Meesho’s long-term potential.
Co-founder and CEO Vidit Aatrey highlighted the company’s broader vision, stating, “If you look at the value-focused bucket, here, you are trying to appeal to mass market consumers selling all kinds of products and categories in a marketplace business model, which tends to be asset light.”
Considering Meesho’s stunning growth trajectory, millions of Indians are still at the starting line on their e-commerce journeys with Meesho. Mohit Bhatnagar, a prominent investor, emphasized this potential by stating, “Many Indians are only experiencing e-commerce for the first time on Meesho, and much like the rest of us, over the next decade, they will buy more and more things and more frequently on this platform.”
As Meesho approaches an eventual IPO, the company will need to prove it has established a durable position in an increasingly cutthroat Indian e-commerce arena. Meesho focuses on being affordable and accessible first in all that they do for consumers. By consistently diversifying its offerings, the company captures a larger and larger customer base.
