Meesho, a leading e-commerce startup in India with around 150 million transacting users, has raised $275 million in a new funding round. revealed in a securities presentation.
The new financing is part of a broader financing round, which will likely include secondary transactions and reach more than $500 million, people familiar with the matter said.
The Bengaluru-based startup, which operates a social commerce platform of the same name, is valued at around $3.9 billion in the new funding, the people said, requesting anonymity as deliberation is still ongoing. The startup, which has raised more than $1.2 billion to date, was valued at $4.9 billion in its previous financing round in September 2021.
WestBridge Capital and Norwest Venture Partners are among investors exploring the possibility of buying stakes in Meesho in recent quarters. West Bridge last year he bought Meesho shares from Venture Highway, an early backer of the Indian startup, TechCrunch first reported. (US investor General Catalyst is separately in talks to acquire Venture HighwayTechCrunch previously reported).
Meesho, which counts Meta, Fidelity, Peak XV, Prosus Ventures, B Capital and SoftBank among its backers, is among the fastest-growing e-commerce startups in the country. Is GMV run rate exceeded $5 billion since the beginning of this year, according to Bernstein analysts.
Meesho has successfully captured the attention of value-conscious customers in tier 2+ markets with its unbranded range and attractive pricing. The startup’s value proposition appears to be resonating well among low- and middle-income customer groups, which constitute the bulk of India’s consumer class.
With 440,000 sellers transacting annually and more than 120 million product listings, Meesho has one of the widest variety of platforms, catering to the complex and heterogeneous preferences of the Indian market, Jefferies wrote in a recent note to its clients.
Traditional e-commerce platforms in India have primarily focused on high-income consumers and brand-name suppliers, resulting in average order values (AOVs) of more than 1,000 Indian rupees ($12). On the contrary, Meesho’s AOV is less than 350 Indian rupees.
“Meesho’s algorithm prioritizes listings by taking into account multiple factors, including seller rating, product rating, customer reviews, customers’ previous purchasing behavior, product popularity, etc. Therefore , price also influences the visibility of a product listing on the market.” Jefferies analysts wrote.
“Meesho’s fulfillment charges are much lower than its peers, allowing the platform to offer lower customer prices than the competition. To reduce costs, Meesho follows an asset-light model and outsources delivery. Meesho has almost half of India’s annual 3PL e-logistics shipment.”
But the competition is heating up. Amazon India Newly Launched Bazaar, a “specialty store” offering affordable and modern fashion and lifestyle products. Economic times first reported about the new financing.