Barely six months after raising USD 300 million, Indian social commerce startup Meesho has received another whopping USD 570 million in funding from B Capital and Fidelity Management.
Existing backers Prosus Ventures, SoftBank Vision Fund 2, and Facebook also participated in this Series F round, while Footpath Ventures, Trifecta Capital, and Good Capital, among others, joined the Meesho’s cap table.
The latest investment has shot up Meesho’s valuation to USD 4.9 billion from USD 2.1 billion in April 2021—a rise of 133%, the startup said in a statement on Thursday. The five-year-old firm has raised a total of USD 1.1 billion in venture capital to date, as per financial data platform Crunchbase.
“Since the last round of funding, Meesho has recorded 2.5x growth in order volume and added a range of new product categories to its roster, including sports and fitness, pet supplies, and automotive accessories,” the company said.
Meesho plans to go deeper into India’s underserved markets—smaller cities and towns—to tap “the next billion users in the country.”
In line with its grand scheme of things, the startup aims to amass 100 million monthly transacting users by December 2022. It did not disclose the current numbers. To reach this milestone, Meesho will utilize the fresh funding to attract top talent and grow its tech and product team by 2.5 times, the company added. Meesho will also increase its product roster to over 50 million items by expanding its grocery and FMCG offerings, and take its community group buying business to over 200 cities.
Meesho’s strategy is to woo shoppers beyond major cities by offering a wide selection of groceries at ticket sizes as low as USD 1-2. The Bengaluru-based startup, co-founded by Vidit Aatrey and Sanjeev Barnwal in 2015, is an online marketplace that allows individuals—primarily women and students—to buy products in bulk from micro, small and medium business and sell them to friends, family, and acquaintances. On behalf of the sellers, the company takes care of all the operations such as order management, product catalogs, last-mile delivery, and digital payments.
“Meesho is now enabling 100 million SMBs across tier-2 cities, empowering them to sell online, leveraging its digital commerce platform,” said Kabir Narang, founding general partner at B Capital Group.
The next wave of growth in India’s digital consumerism will come from Bharat—India beyond tier-1 cities, said Aatrey, founder and CEO of Meesho.
“We’ve always focused our efforts on enabling entrepreneurs from tier 2+ markets to expand their business and in turn uplift small economic pockets in the country,” he added.
B Capital Group’s Narang said the VC firm has evaluated e-commerce opportunities across emerging markets and is excited about Meesho’s focus on strong unit economics and a consumer-first approach.“Meesho’s business model has an incredibly compelling value proposition with entrepreneurs, end customers, and suppliers consolidating on one platform. It has rapidly emerged as a leading player in this space,” he said.
Since 2018, India has seen a rise in the usage of social commerce platforms like Meesho, DealShare, GlowRoad, CityMall, and Shop101, among others. As Flipkart and Amazon India have largely conquered the e-commerce sector, these startups are scripting a new wave of online commerce, primarily targeting the next 500 million netizens from smaller cities. Although the social commerce startups in the country were significantly impacted when the COVID-19 pandemic hit last year, they started seeing things pick up in late 2020.
According to a recent report by Bain & Company and Sequoia India, social commerce—a USD 1.5–2 billion market today that is projected to reach USD 20 billion by 2025 and USD 70 billion by 2030—has the ability to empower more than 40 million small entrepreneurs across India.
“A few large players have traditionally dominated India’s e-commerce sector, but social commerce is paving the way for a more distributed model that’s built on community, connection, and trust,” the report noted. “While traditional e-commerce will continue to grow, social-led models will help redefine the landscape over the next five to ten years.”
“In short, India’s social commerce sector will be twice the size of the current e-commerce market within ten years,” it added.
