Meesho, an Indian e-commerce contender that’s taking on heavyweights like Amazon and Flipkart, is gearing up for an IPO worth about $606 million. This move comes amidst a global trend where tech investors are seeing returns from their listings. Interestingly, notable investors such as SoftBank and Prosus are not participating in the sale, signaling strong belief in India’s thriving online retail scene.
The ten-year-old startup plans to price its shares between ₹105 and ₹111, aiming to raise ₹42.5 billion (around $475 million) in new funding, with a smaller portion from selling existing shares. This would give Meesho a post-IPO market valuation of roughly ₹501 billion (approximately $5.6 billion), a slight uptick from its last private market valuation of about $5 billion in 2021.
Meesho is on track to be the first major horizontal e-commerce platform in India to go public. Meanwhile, competitors like Flipkart are eyeing a potential IPO next year, and Amazon is looking at options for a possible spin-off of its Indian operations for a future listing.
In the IPO, early backers like Elevation Capital and Peak XV Partners will be selling off parts of their stakes, while larger investors like SoftBank and Fidelity are sitting this one out. Specifically, Elevation Capital is selling over 4% of its shares, and Peak XV Partners will offload about 3% of theirs. Meanwhile, Meesho’s co-founders, Vidit Aatrey and Sanjeev Kumar, are increasing their share offering from around 23.5 million shares to 32 million.
Founded in 2015, Meesho started as a social commerce platform aimed at first-time online shoppers via WhatsApp and has transformed into a full-fledged marketplace. The company’s model appeals to price-sensitive consumers and small businesses, putting pressure on bigger players like Amazon and Flipkart. Meesho operates with a low-commission approach, mainly generating revenue from logistics, advertising, and services, while also charging commissions on products sold through its Meesho Mall.
For the six months ending September 30, Meesho reported operational revenue of ₹55.78 billion (approximately $624 million), up from ₹43.11 billion (about $482 million) a year prior. Even though its net merchandise value grew by 44% year-over-year to ₹191.94 billion (around $2.15 billion), the company saw its losses widen, recording a pre-tax loss of ₹4.33 billion (around $48.4 million) for the same period compared to a loss of ₹240 million (about $2.7 million) a year earlier.
Over the last year, Meesho had 234.20 million unique consumers making purchases on the platform and approximately 706,471 annual transacting sellers. Additionally, the company has harnessed a vast network of over 50,000 content creators to facilitate product discovery.
“Many Indians are experiencing e-commerce for the first time on Meesho, and they’re likely to shop more frequently on this platform as time goes on,” said Mohit Bhatnagar, managing director at Peak XV Partners, emphasizing the long-term potential of retaining their stake.
Peak XV invested in Meesho back in 2018 during its Sequoia Capital era and holds about 13% across its two investment vehicles. They plan to sell around 17.38 million shares in the upcoming IPO.
Meesho has branded itself as a value-driven platform, contrasting with Amazon and Flipkart, which focus on convenience. The company draws parallels with other value-centric marketplaces like Pinduoduo in China and Mercado Libre in Latin America.
“If you’re targeting mass-market consumers with a diverse range of products, a marketplace model that’s asset-light makes sense,” Aatrey shared during a press conference, highlighting their focus on selection and affordability.
According to CFO Dhiresh Bansal, the IPO also aims to enhance the company’s ability to attract top talent and bolster confidence throughout its ecosystem. A public listing can elevate its brand among potential hires, especially those from larger tech firms, and positively influence consumers, sellers, and logistics partners by reinforcing Meesho’s governance standards.
The IPO is set to open for public subscriptions on December 3, with an anchor book launch on December 2. About 75% of the shares are reserved for qualified institutional buyers, while 10% is for retail investors and 15% for non-institutional investors.
SoftBank has yet to respond to requests for comment.
