Meesho, India's leading e-commerce startup with approximately 150 million trading users, has secured $275 million in a new funding round, the company said in a securities filing.
The new funding is part of a larger funding round that will likely include secondary deals and bring the total to more than $500 million, people said.
The Bengaluru-headquartered startup, which operates a social commerce platform of the same name, is valued at about $3.9 billion in new funding, the people said, asking not to be identified as the discussions are still ongoing. . The company has raised more than $1.2 billion to date, and was valued at $4.9 billion in its previous funding round in September 2021.
WestBridge Capital and Norwest Venture Partners were among the investors looking to buy Meesho stock in recent quarters. As first reported by TechCrunch, WestBridge bought Meesho stake last year from Venture Highway, an early backer of Indian startups. (U.S. investor General Catalyst is in separate talks to acquire Venture Highway, TechCrunch previously reported.)
Meesho counts Meta, Fidelity, Peak XV, Prosus Ventures, B Capital and SoftBank as backers and is one of the fastest growing e-commerce startups in the country. The company's gross merchandise value exceeded $5 billion as of the beginning of this year, according to analysts at Bernstein.
Meesho has been successful in attracting the attention of value-conscious customers in Tier 2 and above markets with its attractive prices and diverse unbranded product range. The startup's value proposition appears to be resonating with low- to middle-income customers, who make up a large portion of India's consumer base.
With 440,000 annual sellers and more than 120 million product listings, Meesho has the widest selection across the platform and caters to the complex and diverse tastes of the Indian market, Jefferies said. he wrote in a recent memo to clients.
Traditional e-commerce platforms in India primarily focused on high-income consumers and branded suppliers, resulting in average order value (AOV) well above INR 1,000 ($12) . In contrast, his AOV in Meesho is less than INR 350.
“Meesho’s algorithm prioritizes listings by considering multiple factors including seller ratings, product ratings, customer reviews, customers’ past shopping behavior, product popularity, etc. Pricing also affects the discoverability of product listings in the marketplace,” Jefferies analysts wrote.
“Meesho's fulfillment fees are much lower than its competitors, allowing the platform to offer lower prices to its customers than its competitors. To reduce costs, Meesho follows an asset-light model and outsources shipping. Meesho accounts for almost half of India's annual 3PL e-logistics shipments.
But competition is intensifying. Amazon India recently launched Bazaar, a 'special store' with trendy fashion and lifestyle products at affordable prices. The Economic Times first reported on the new funding.