Indian E-commerce Startup Meesho Attains First Profit, Eyes IPO in Next 12-18 Months

• ByStartupStory     |    August 7, 2023

Meesho, an Indian e-commerce startup, has achieved its maiden profit and is now eyeing a potential stock market listing within the next 12 to 18 months, as outlined by a senior executive in an interview.

Meesho competes with Amazon and Walmart’s Flipkart in India’s fast-growing e-commerce market, with its website becoming popular by targeting smaller towns and cities with unbranded products like clothes and cosmetics. It was last valued at nearly $7 billion, PitchBook data shows. 

After posting losses since its inception in 2015, Meesho, which is backed by Japan’s SoftBank (9984.T), recorded profits for the first time last month, it said in a statement. Its revenue between January-June was more than $400 million, and Meesho expects it to cross $800 million by the year-end, Chief Financial Officer Dhiresh Bansal told sources on Friday. “Since we just turned from negative to positive, it’s a small nominal kind of number, single digit of course… We intend to continue the profitability trajectory,” he said without sharing specifics. An initial public offering (IPO) is now being planned for the next 12-18 months, Bansal added. 

“We feel that the growth, scale, and profitability are there (for an IPO), but you also want to make sure that there is enough of a track record for market investors to look at.”

In the competitive landscape of India’s rapidly expanding e-commerce market, Meesho rivals giants like Amazon and Walmart-owned Flipkart. The company has gained traction by catering to smaller towns and cities, offering unbranded products such as clothing and cosmetics. According to PitchBook data, Meesho’s most recent valuation stood at approximately $7 billion.

Following several years of losses since its inception in 2015, Meesho, backed by Japan’s SoftBank (9984.T), declared its first-ever profit last month, marking a significant milestone for the company.

During the first half of the year, Meesho’s revenue exceeded $400 million. Chief Financial Officer Dhiresh Bansal disclosed to Reuters that the company anticipates this figure to surpass $800 million by the end of the current year. While specific profit details were not disclosed, Bansal indicated that the transition from negative to positive figures was incremental.

Meesho is now charting a course toward an initial public offering (IPO) within the next 12 to 18 months, according to Bansal. He emphasized the importance of establishing a solid track record for potential market investors, aligning growth, scale, and profitability.

Founded by graduates of the Indian Institute of Technology, Vidit Aatrey, and Sanjeev Barnwal, Meesho achieved the noteworthy milestone of processing over 1 billion orders in the past year.

This achievement of profitability comes at a time when the funding environment for Indian startups has been challenging, marked by limited investment due to elevated interest rates and a global downturn in the tech market. In response, many Indian startups have streamlined operations, letting go of employees and implementing aggressive cost-cutting measures.

Notably, Zomato, a prominent Indian food delivery giant, also reported its first-ever profit in the past week.

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