Meesho Secures $570 Million in Funding Round

Overview

Social commerce platform Meesho has successfully raised $570 million in a funding round led by Fidelity Management and B Capital, co-owned by a Facebook cofounder. This substantial investment has propelled Meesho’s valuation to $4.9 billion, doubling from its previous valuation of $2.1 billion in April 2021.

Utilization of Capital

Meesho intends to utilize this capital to bolster its research and development (R&D) capabilities and attract more users to its platform. The company aims to expand its monthly transacting user base to 100 million by December 2022, a significant increase from the current 15 million. To achieve this ambitious goal, Meesho plans to enhance its technology and product teams and diversify its product selection to encompass over 50 million items.

Significance in 2021’s Funding Landscape

The year 2021 has witnessed remarkable achievements for Indian startups, with several companies achieving unicorn status and securing substantial funding rounds. According to Tracxn, Indian startups have collectively raised $23 billion in funding by September 1, surpassing the total funding raised in the entirety of 2020. Meesho’s funding round stands out as one of the largest of the year.

Expansion Plans and Focus on Grocery Vertical

Meesho intends to allocate a portion of the raised capital towards expanding its grocery delivery marketplace, Farmiso, launched earlier in the year. The company also plans to aggressively recruit talent to support its grocery vertical.

Meesho’s Business Model

Established in 2015 by Vidit Aatrey and Sanjeev Barnwal, Meesho operates a three-sided marketplace connecting suppliers, resellers, and customers. Resellers purchase unbranded fashion products from suppliers and sell them through social media platforms like WhatsApp and Instagram. The company also operates a direct sales channel.

Investor Participation

The latest funding round attracted participation from new investors such as Footpath Ventures, Trifecta Capital, and Good Capital, alongside existing investors including Prosus Ventures, SoftBank Vision Fund 2, and Facebook.

DealShare: Potential Unicorn Club Entrant

DealShare, another player in the social commerce space, is poised to become the next unicorn startup. Talks with new and existing investors suggest that DealShare is exploring funding opportunities that could value the company at over $1 billion.