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Meesho Raises $275M: Indian Social Commerce Giant

Meesho, a pioneering e-commerce startup in India has announced securing $275 million in its latest funding round
May 13, 2024

Meesho, a prominent e-commerce startup in India boasting approximately 150 million transacting users, has successfully secured $275 million in a new funding round, as disclosed in a securities filing.

This new funding is part of a larger financing round that is expected to include secondary transactions, potentially ballooning to over $500 million, according to sources familiar with the matter.

The Bengaluru-based startup, renowned for its social commerce platform, is currently being valued at approximately $3.9 billion in this round of funding. This is a slight drop from its valuation of $4.9 billion during its last capital raise in September 2021. To date, Meesho has raised over $1.2 billion.

Investors eager to join this funding round include WestBridge Capital and Norwest Venture Partners. WestBridge had acquired Meesho shares from Venture Highway, an early backer, last year. Notable existing investors in Meesho include Meta, Fidelity, Peak XV, Prosus Ventures, B Capital, and SoftBank.

The Economic Times was the first to report on this new funding.

Meesho has emerged as one of the fastest-growing e-commerce startups in India, boasting a run-rate GMV (Gross Merchandise Value) of over $5 billion, according to analysts at Bernstein earlier this year.

The startup has effectively captured the attention of value-conscious Indian consumers with its attractively priced, diverse, and unbranded range of goods. Meesho's value proposition appears to resonate particularly well with low- to mid-income customers, who make up the majority of India’s consuming class.

With 440,000 annual transacting sellers and over 120 million listings, Meesho offers one of the widest assortments of goods across platforms, catering to the diverse and complex preferences of the Indian market, according to a recent note by Jefferies to its clients.

Unlike traditional e-commerce platforms in India, which primarily focus on high-income consumers and branded suppliers, Meesho maintains an average order value (AOV) significantly below ₹350. 

“Meesho’s algorithm prioritizes listings by taking into account multiple factors, including seller rating, product rating, customer reviews, customers’ past shopping behavior, popularity of the product, etc. Hence, pricing also influences the discoverability of a product listing on the marketplace,” wrote Jefferies analysts.

“Meesho’s fulfillment charges are much lower than peers, allowing the platform to offer lower prices to customers compared to the competition. In order to drive costs lower, Meesho follows an asset-light model and outsources delivery. Meesho accounts for nearly half of India’s annual 3PL e-logistics shipment,” the Jefferies note read.

However, the competition is intensifying. Amazon India recently launched Bazaar, a “special store” featuring affordable and trendy fashion and lifestyle products, indicating the escalating competition in the Indian e-commerce market.

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