Meesho, a prominent e-commerce startup in India, has secured $275 million in a recent funding round, according to a securities filing. This funding is part of a larger financing round that is expected to reach over $500 million. The valuation of Meesho is estimated to be around $3.9 billion in this round, compared to its previous valuation of $4.9 billion in September 2021.
Several investors, including WestBridge Capital and Norwest Venture Partners, have shown interest in investing in Meesho. WestBridge Capital purchased Meesho shares from Venture Highway last year. Notable backers of the company include Meta, Fidelity, Peak XV, Prosus Ventures, B Capital, and SoftBank.
The Economic Times was the first to report on Meesho’s new funding. The startup is one of the fastest-growing e-commerce companies in India, with an estimated run-rate Gross Merchandise Value (GMV) of over $5 billion. Meesho has successfully attracted value-conscious Indian consumers with its affordable and diverse range of unbranded products. This value proposition has resonated particularly well with low- to mid-income customers, who make up the majority of India’s consumer base.
Meesho stands out with its wide assortment of goods and listings, catering to the complex and diverse preferences of the Indian market. According to Jefferies, Meesho has 440,000 annual transacting sellers and over 120 million listings. Traditional e-commerce platforms in India have typically focused on higher-income consumers and branded suppliers, resulting in higher average order values (AOVs). In contrast, Meesho’s AOV is usually below ₹350.
Jefferies analysts explained that Meesho’s algorithm prioritizes listings based on various factors such as seller rating, product rating, customer reviews, past shopping behavior, and product popularity. This approach allows Meesho to offer competitive prices to customers. Additionally, Meesho’s fulfillment charges are lower than its competitors, thanks to its asset-light model and outsourced delivery. As a result, Meesho has a significant share of India’s annual third-party logistics (3PL) e-logistics shipment.
However, Meesho faces increasing competition in the market. Amazon India recently launched Bazaar, a specialized store featuring affordable and trendy fashion and lifestyle products. This move indicates that larger e-commerce players are recognizing the potential of the value-conscious consumer segment that Meesho caters to.
In conclusion, Meesho’s recent funding round and valuation highlight its success in capturing the attention of value-conscious Indian consumers. The startup’s wide assortment of goods, low average order values, and competitive pricing have contributed to its rapid growth. However, with increasing competition from established players like Amazon, Meesho will need to continue innovating and refining its value proposition to maintain its position in the market.