Meesho Explores IPO Plans After Achieving First-Ever Profitable Month

• ByStartupStory     |    August 18, 2023

Meesho, an e-commerce startup headquartered in Bengaluru, is reportedly considering a potential initial public offering (IPO) in the coming year, following its recent achievement of its first-ever profitable month. According to multiple media reports, Meesho’s Chief Financial Officer, Dhiresh Bansal, has indicated that the company is evaluating the option of going public within the next 12 to 18 months, contingent on the prevailing market conditions.

Having been established in 2015 and backed by SoftBank, Meesho posted its inaugural profit in the previous month. The startup’s revenue during the period spanning January to June exceeded $400 million, marking a 40% increase in comparison to the corresponding timeframe the previous year. Meesho is anticipating this figure to surpass $800 million by the close of the current year. Over the past year, the company has registered a 54% growth in revenue, attributed to an uptick in order volume. Notably, Meesho has managed to curtail customer acquisition and marketing expenses by 80% year-on-year, along with reducing technology costs by 60%, underscoring enhanced operational efficiency.

With a valuation approaching $7 billion, Meesho secured approximately $1 billion in funding from investors including Prosus, B Capital, and Fidelity. The startup’s mission revolves around democratizing e-commerce by catering to online shoppers in smaller Indian cities often overlooked by major e-commerce players such as Amazon and Flipkart. In response, Flipkart introduced a “zero-commission” platform called Shopsy to compete with Meesho, while Mukesh Ambani’s Reliance Industries is partnering with the Chinese fashion brand Shein to introduce budget-friendly fashion lines in India. Additionally, there are reports of Reliance planning to launch a commission-free marketplace for affordable fashion products.

Concurrently, Meesho has initiated discussions with prominent brands, including FMCG giants ITC and Marico, as well as personal care company Mamaearth. These companies are subjected to a commission fee of up to 5% based on the order value. In contrast, small merchants continue to operate on Meesho’s platform without incurring any commissions.

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