Meesho, a fast-growing e-commerce platform in India, is on track to break new ground! If it succeeds, it will be the first major horizontal e-commerce company to get public. That first initial public offering (IPO) is seeking to raise at least ₹42.50 billion, or close to $475 million. Investors can look forward to shares being priced at a range of ₹105-₹111/share. This directional development is a path-breaking moment for India’s burgeoning e-commerce industry.
According to the latest filing, there’s a huge cut in the offer-for-sale portion of Meesho. This is a reduction of about 40% from the draft prospectus filed in mid-October, for a total of 105.5 million shares. Meesho as it prepares for a stock market debut. With this change the city looks to build on its recent rapid growth and strong market position.
Founded in 2015, Meesho was valued at $5 billion in private markets last year. The for-benefit company is extremely commission-light. Its business model relies heavily on logistics fees, advertising, and other services rather than the sale of goods in the conventional sense. It does impose commissions on goods sold via its distinct Meesho Mall channel.
In the six months ending September 30, Meesho logged revenue from operations of ₹55.78 billion (about $624 million). It’s been an exciting time with the platform’s explosive growth! Its net merchandise value surged 44% YoY to ₹191.94 billion (~$2.15 billion). This growth was made possible with the help of an engaged community made up of more than 50,000 content creators. Each of them has produced at least one sale from their content in the last 12 months.
The IPO has generated considerable curiosity, not just for its market impact but for the players involved in the company’s go-to-market strategy. Peak XV first backed Meesho in 2018. Now, they are taking it down to about 17.38 million shares in the offering, while retaining a 13% stake through two of their investment vehicles in the company. Elevation Capital will be selling down a little over 4% of its ownership in Meesho. At the same time, Y Combinator is lowering its own stake by nearly 14%.
Meesho’s post-issue valuation will be at ₹501 billion, close to $5.60 billion. This fiscal fortitude ensures that it remains a formidable competitor within the bustling Indian e-commerce arena. Aatrey, co-founder of Meesho, described the platform’s compelling value prop like this,
“If you look at the value-focused bucket, here, you are trying to appeal to mass market consumers selling all kinds of products and categories in a marketplace business model, which tends to be asset light.”
The company’s strategy seems perfectly timed as millions of Indians start to discover the joys of shopping online. Mohit Bhatnagar, a partner at one of the biggest Indian venture capital firms, noted Indian consumers’ accelerating adoption of e-commerce. Yet, he insisted this trend is quickly changing the landscape.
“Many Indians are only experiencing e-commerce for the first time on Meesho, and much like the rest of us, over the next decade, they will buy more and more things and more and more frequently on this platform.”
As Meesho prepares for its IPO, it aims to leverage its established presence and unique business model to attract a broad range of investors. The company’s approach has resonated well with consumers looking for diverse products at competitive prices, setting the stage for future growth.
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