Meesho Battles Amazon & Flipkart with Fresh $275M Funding

May 12, 2024: Meesho, which claims to be the only true e-commerce marketplace has marched towards a $4 billion valuation after securing $275 million in a funding round. This initial tranche is part of a larger fundraising effort targeting $500 million to $600 million, according to media reports.

“This funding strengthens Meesho’s position as a major player in the Indian e-commerce landscape,” said a company spokesperson (source withheld due to privacy concerns). “The fresh capital will fuel our growth initiatives and solidify our fight against established giants like Amazon and Flipkart.”

The funding round, a mix of primary and secondary share sales, saw participation from existing investors like SoftBank, Prosus, Elevation Capital, and Peak XV Partners. Importantly, the US SEC filing did not disclose details of any new investors joining the ongoing round. However, The Economic Times reports suggest follow-on investments totaling $200 million with potential participation from new entrants.

In 2023 the firm recorded 1.6 Crore New App Installs During the Mega Blockbuster Sale, Categories like Footwear and Kidswear see ~120% Growth. The company claimed to have nearly 120 crore customer visits, in categories such as Home & Kitchen, Fashion as well as Beauty & Personal Care.

This news comes on the heels of a valuation cut by Fidelity Investments in January 2024, where the commerce marketplace stake was marked down to $3.5 billion. The company attributed this adjustment to an increase in outstanding shares due to an expanded Employee Stock Ownership Plan (ESOP) pool.

Meesho Secures $275 Million, Eyes $600 Million in Ongoing Funding Round

Despite the valuation dip, analysts remain bullish on Meesho. Research firm Bernstein highlights the company as one of India’s fastest-growing e-commerce businesses. Meesho has carved a niche in the market by offering competitively priced products, resonating with India’s value-conscious consumers.

The company boasts a near-zero cash burn rate and targets achieving EBITDA breakeven soon. This financial resilience is crucial as the social commerce firm navigates a competitive landscape. Quick commerce players are expanding their product portfolios, while the government-backed Open Network for Digital Commerce (ONDC) adds another layer of competition.

Meesho’s latest funding round paves the way for potential exits for pre-Series A investors, including Meta, which was reportedly approached to offload a portion of its stake, according to The Economic Times.

This significant fundraising signifies the social commerce firm’s determination to solidify its position as a dominant force in India’s booming social commerce sector.

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