Meesho, India’s leading e-commerce startup with around 150 million transacting users, has secured $275 million in a fresh round of funding, says the company revealed in the securities filing.
The fresh financing is part of a larger financing round that is likely to include secondary transactions and exceed an amount of more than $500 million, people familiar with the matter told TechCrunch.
The Bengaluru-based startup, which operates a social commerce platform, is valued at around $3.9 billion in this round, the people said, asking not to be identified because discussions are still ongoing. The startup, which has raised over $1.2 billion to date, was valued at $4.9 billion when it last raised capital in September 2021.
Several investors tried to get into Meesho, including WestBridge Capital and Norwest Venture Partners. Last year, WestBridge bought shares of Meesho from Venture Highway, an early sponsor. The company counts Meta, Fidelity, Peak XV, Prosus Ventures, B Capital and SoftBank among its sponsors.
Indian daily The Economic Times first reported fresh financing.
Meesho is one of the fastest growing e-commerce startups in the country. Bernstein analysts estimated earlier this year that its GMV was more than $5 billion.
Meesho has successfully captured the attention of value-conscious Indians with its attractively priced, diverse and unbranded range of goods. The startup’s value proposition seems to resonate well with low- and middle-income customers, who constitute the bulk of India’s consumer class.
With 440,000 sellers transacting annually and over 120 million listings, Meesho boasts one of the widest merchandise assortments across platforms, catering to the convoluted and heterogeneous preferences of the Indian market, Jefferies wrote in a recent note to its clients.
Conventional e-commerce platforms in India mainly focus on high-income consumers and branded suppliers, resulting in average order value (AOV) well above ₹ 1,000 (approximately $ 12). In contrast, Meesho’s AOV is typically under £350.
“The Meesho algorithm prioritizes offers by taking into account many factors, including seller rating, product rating, customer reviews, previous customer purchasing behavior, product popularity, etc. Therefore, price also affects the discoverability of product information in the market.” Written by Jefferies analysts.
“Meesho’s order fulfillment fees are significantly lower than other providers, which allows the platform to offer customers lower prices compared to competitors. To reduce costs, Meesho uses a resource-saving model and outsources delivery to third parties. Meesho has almost half the share of India’s annual 3PL e-logistics shipments,” Jefferies’ note said.
But the competition is gaining momentum. Amazon India recently launched Bazaar, a ‘specialty store’ offering affordable and trendy fashion and lifestyle products.
