Meesho, an Indian social marketplace with 150 million transacting users, raises $275 million in new financing

Meesho, which has raised over $1.2 billion to date, is increasingly gaining value-conscious customers in India’s smaller cities and towns.

Meesho, India’s leading e-commerce startup with around 150 million transacting users annually, has secured $275 million in a new round of funding, it disclosed in a securities filing.

The new financing is part of a larger financing round that is likely to include secondary transactions and exceed an amount of more than $500 million, people familiar with the matter said.

The Bengaluru-based startup, which operates an eponymous social commerce platform, is valued at about $3.9 billion in the new financing, the people said, asking not to be identified because discussions are still ongoing. The startup was valued at $4.9 billion in its previous funding round in September 2021.

In recent quarters, investors considering purchasing shares in Meesho included WestBridge Capital and Norwest Venture Partners. As first reported by TechCrunch, last year WestBridge bought shares of Meesho from Venture Highway, which was an early backer of the Indian startup. (US investor General Catalyst is in separate talks to acquire Venture Highway, TechCrunch previously reported.)

Meesho – which includes Meta, Fidelity, Peak XV, Prosus Ventures, B Capital and SoftBank – is one of the fastest growing e-commerce start-ups in the country. According to Bernstein analysts, GMV turnover was over $5 billion at the beginning of this year.

Meesho has successfully attracted the attention of value-conscious customers in tier 2+ markets with its attractively priced and diverse unbranded product range. The startup’s value proposition appears to be well-suited to the low- and middle-income customer cohorts that make up the bulk of India’s consumer class.

With 440,000 sellers transacting annually and over 120 million product listings, Meesho boasts one of the broadest assortments across platforms, catering to the complex and heterogeneous preferences of the Indian market, Jefferies wrote in a recent note to its clients.

Traditional e-commerce platforms in India mainly focus on high-income consumers and branded suppliers, resulting in an average order value (AOV) well over 1,000 Indian rupees ($12). In contrast, Meesho’s AOV is below Rs.350.

“The Meesho algorithm prioritizes offers by taking into account many factors, including seller rating, product rating, customer reviews, past customer purchasing behavior, product popularity, etc. Therefore, price also affects the discoverability of product information in the market.” Written by Jefferies analysts.

“Meesho’s order fulfillment fees are significantly lower than other suppliers, which allows the platform to offer customers lower prices compared to competitors. To reduce costs, Meesho uses a resource-saving model and outsources delivery. Meesho has almost half the share of India’s annual 3PL e-logistics shipments.”

But the competition is gaining momentum. Amazon India recently launched Bazaar, a ‘specialty store’ offering affordable and trendy fashion and lifestyle products. Economic Times was the first to report on the new funding.