Meesho, the Bengaluru-based e-commerce platform, has secured USD 270 million (~INR 2,330 crore) in the latest funding round. This round, largely driven by secondary share sales, also included contributions from existing backers Peak XV and WestBridge Capital.
This funding values Meesho at approximately USD 3.9-4 billion (~INR 31,000 crore), a notable decrease of 20% compared to its earlier valuation of USD 4.9 billion (INR 38,000 crore).
Meesho Funding – Key Insights
The USD 550 million raised over the past year includes USD 250-270 million (~INR 2,160-2,330 crore) from primary capital in this latest round that saw participation from Tiger Global, Think Investments, and Mars Growth Capital. Much of the funds will be allocated to tax liabilities linked to Meesho’s reverse merger—a critical step in its plan to shift domicile from the United States to India. This restructuring aims to set the stage for Meesho IPO, targeted for a local listing.
Shifting Domicile for IPO Preparation
In preparation for its public market debut, Meesho has filed a domicile transfer application with the National Company Law Tribunal (NCLT) in Bengaluru. The shift, often referred to as a “reverse flip,” is a growing trend among Indian startups seeking IPOs on local exchanges.
The company intends to file its draft red herring prospectus (DRHP) by late 2025, with plans to list it by 2026. However, the timeline hinges on the pace of regulatory clearances from the NCLT, a key determinant in the process.
Financial and Operational Performance
The company delivered impressive financial results in FY24, posting a 33% increase in revenue to INR 7,615 crore compared to INR 5,734.5 crore in FY23. Net losses fell sharply by 81.8%, from INR 1,675 crore to INR 304.9 crore.
Importantly, the company achieved operating cash flow positivity in FY24, a critical milestone in its journey toward sustainable profitability. Core metrics such as gross sales, net merchandise volume, and revenue growth improved by 30-40%, highlighting the company’s operational strength.
Expanding Its Market Reach
Since its founding in 2015 by Vidit Aatrey and Sanjeev Barnwal, Meesho has grown to host over 15 lakh sellers and serve more than 140 million annual transacting users, primarily targeting non-metro regions.
In FY24, the company launched “Meesho Mall,” a brand-focused marketplace that operates on a commission-based model, marking a shift from its traditional zero-commission approach. This move complements its revenue streams, which include advertising and logistics services.
IPO and Industry Landscape
Meesho’s IPO ambitions reflect a broader trend among Indian startups aligning operations for public listings. If successful, Meesho could become the first horizontal ecommerce platform to list on local stock exchanges.
Other high-profile startups, including Flipkart, PhonePe, and Groww, are also preparing for IPOs, with many undertaking domicile shifts to meet regulatory requirements. Companies such as Zepto, Pine Labs, and Razorpay face similar hurdles, including tax implications from reverse mergers. Meesho’s latest funding aims to address such challenges head-on.
Outlook
Meesho funding round reinforces investor confidence in the company’s growth trajectory and IPO readiness. The company’s success will depend on navigating regulatory processes, managing tax obligations, and maintaining strong financial performance.
Meesho’s ability to balance growth and profitability while adapting to shifting market dynamics positions it as a bellwether for startups transitioning from private ownership to public listings on Indian exchanges.
In 2024, the Indian primary market experienced notable activity, featuring 90 IPOs. Of these, 71 IPOs delivered positive returns. Despite this success, some challenges emerged, with 19 IPOs yielding negative returns. The average listing return for IPOs stood at an impressive 30.12%. These figures underscore the market’s potential for substantial gains and opportunities.
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