Meesho Eyes Larger 500 Mn-650 Mn Dollars Round At Lower Valuation

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Three points you will get to know in this article:

  • Meesho aims for $500-650M (approximately Rs. 4-5 thousand Crore)funding at lower value.
  • Tiger Global, Peak XV lead funding with SoftBank, WestBridge, Mars.
  • Meesho’s value likely to decrease to $3.9 Bn (approximately Rs. 32 thousand Crore) from $4.9 Bn (approximately Rs. 40.8 thousand Crore).

Expansion of Funding Round

According to reports, the ecommerce platform Meesho is seeking to raise the size of its next funding round to $500-$650 million from the initial $300 million, due to high interest from investors.

Of the total amount, around $300 million will be used as primary capital to cover taxes related to the relocation of the company’s headquarters from Delaware to India. The rest will be allocated to the secondary component.


Investor Engagement and Funding Dynamics

The negotiations are ongoing and the final round size will be determined by how much each investor dilutes their stake, but it is likely to total $500 million, according to a source quoted in the report. Meesho has also been in talks with Accel for funding in recent months. However, discussions between the investor and the company did not come to fruition, the report added. It is worth noting that Accel was among the first investors in Flipkart, which is Meesho’s main competitor. Recent reports have suggested that the e-commerce startup was in discussions to raise $300 million from Tiger Global, Peak XV Partners, SoftBank, and other investors. Tiger Global and Peak XV are expected to take the lead in the current funding round, with backing from SoftBank, WestBridge Capital, and Singapore-based Mars Growth Capital. Additionally, Venture Highway and Meta (formerly Facebook) are reportedly early supporters looking to reduce their stake in Meesho during this round.

ngapore to India.

KreditBee has been diligently working on this move for several months now. The startup is actively engaging with regulators and navigating through tax responsibilities as part of its strategic transition back to India.

Valuation Adjustment and Market Dynamics

However, there’s a twist in the tale as the funding round is likely to value Meesho at $3.9 billion, marking a 20% decrease from its previous valuation of $4.9 billion. This dip in valuation comes after Fidelity decided to peg Meesho’s value at $3.5 billion.

Meesho chose not to respond to inquiries regarding the funding round and decrease in valuation. There was no response received up to the time of publishing this story.

It is important to mention that Fidelity, in January, reduced the valuation of Meesho on its books, valuing the ecommerce startup at $3.5 billion, a decrease of 29% from Fidelity’s previous peak valuation of $4.9 billion for Meesho.

Strategic Evolution and Market Positioning

Established in 2015 by Vidit Aatrey and Sanjeev Barnwal, Meesho, previously known as a pioneer in social ecommerce, underwent a strategic shift in 2022 to transform into a marketplace.

According to a recent report by brokerage Bernstein, Meesho is experiencing rapid growth and gaining market share in the ecommerce sector, particularly in Tier-II and III cities of India. It is now recognized as the fastest-growing ecommerce platform in the country.

Meesho recently announced the launch of a INR 200 Cr (approximately $25 Mn) employee stock ownership plan (ESOP) buyback program. This is the largest ESOP buyback program ever undertaken by Meesho and will benefit approximately 1,700 past and current employees.

Meesho, the e-commerce platform, is seeking to upscale its funding round to 500−650 million. Of this, around $300 million is dedicated to covering tax expenses related to its headquarters’ relocation from Delaware to India. Investor interest is substantial, with key players such as Tiger Global, Peak XV, and SoftBank showing interest in leading the round. Notably, the company’s valuation is expected to decrease by 20%, potentially influencing the ongoing funding endeavor. Meesho’s strategic shift to a marketplace model has positioned it as the fastest-growing e-commerce platform in India. Additionally, the company’s INR 200 Cr ESOP buyback program further demonstrates its commitment to employee welfare and retention.

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