Bengaluru-based social commerce startup Meesho has raised $50 Mn in a Series C funding round. With this round, the company marked the entry of three new investors: Shunwei Capital, DST Partners and RPS Ventures.
Existing investors including Sequoia India, SAIF Partners, Venture Highway and Y Combinator (2017) also participated in the latest funding round.
This brings the total funding raised by Meesho so far to a total of $65.2 Mn. The company counts investors such as YCombinator, Venture Highway, VH Capital, Kashyap Deorah, Rajul Garg, Oyo Rooms’ Maninder Gulati, Abhishek Jain, and Jaspreet Bindra, and others in its portfolio.
Founded by IIT graduates Vidit Aatrey and Sanjeev Barnwal in 2015, Meesho is a mobile-first ecommerce platform for resellers such as housewives who then use channels such as WhatsApp and social media platforms Facebook and Instagram to promote products within their social circles.
The company plans to use the funding to build a stronger product, scale its technology team while expanding into more categories and scaling domestic and international supply base.
The development comes on the heels of reports that Meesho was in advanced talks to raise $40-50 Mn at an expected valuation of $250 Mn to be led by DST Global and others.
What Do Investors Say?
Mohit Bhatnagar, Managing Director, Sequoia Capital India Advisors believes that social commerce is finally enabling everyone – women and men across all age groups to become micro-entrepreneurs.
At such times, startups like Meesho are certainly creating a difference and are bringing in the much required innovation in the space, believes Kabir Misra, Founder and Managing Partner, RPS Ventures. “We are hoping to assist them with our accumulated experience in the sector to further grow their business in India and beyond.”
“Social ecommerce is the next big thing in the ecommerce space of India. We strongly believe that Meesho’s social reselling model is highly suitable for the great number of new-to-Internet buyers. It’s our pleasure to work with the excellent team of Meesho on this exciting opportunity,” Tuck, founding partner and CEO, Shunwei Capital added further.
While other investors are fans of Meesho’s innovative and differentiated business model, SAIF Partners have its heart in the leadership team.
“We first invested in Meesho a little over a year back, and have been really impressed by the pace at which the company has grown. This has been made possible by the quality of leadership team that Vidit has built, and his relentless focus on customer experience. We are thrilled to continue backing them, and welcome all the new investors to this partnership,” said Mukul Arora, Managing Director, SAIF Partners.
Well, Meesho is worth it. The company claims to have witnessed a 10x growth over the last six months. The company currently deals in sectors such as fashion, lifestyle, and home and kitchen and it’s also engaged in building a new distribution channel for suppliers and helping housewives earn from within their social networks.
Social Commerce: An Untapped Market
Since the advent of consumer Internet, the market has been rife with opportunities and scalability for niche product and ideas.
With more than 500 Mn Indians relying on the Internet for their day-to-day life, shopping online has become an inherent choice. Interestingly, according to Statista, over 2.14 Bn people worldwide are expected to buy goods and services online by 2021. The same source also revealed that India had witnessed $16.7 Bn sales in 2016.
This is further illuminated in a 2017 Zinnov Report, which expects that India’s ecommerce market is aiming to touch $220 Bn by 2025, benefitting from this – the online housewive resellers are going to touch 21-23 Mn by 2022.
Also, the report emphasises that the online resellers space has been projected to grow to $48 Bn-$60 Bn by 2022.
At the same time, the market share of online resellers is expected to rise from the current 1.2% of the Indian retail market to 5.4%.
With increasingly unique and experimental ideas making social commerce a new niche to explore, the market is getting increasing investor attention along with new entrepreneurs budding up with startups like Shop101, Wooplr and more.
According to a recent report by Google and the Boston Consulting Group, India has about 50 Mn registered small businesses and about one million of them are online, mostly selling through Facebook and WhatsApp. It is expected that 10 Mn of these businesses will be online by 2020.
Talking to Inc42, Aatrey shared that they haven’t found any big competition yet as they are the biggest player in the space. But it is interesting to note here that chat-based messaging app WhatsApp with its WhatsApp Business has targeted small businesses and this is bound to create some tough times for players like Meesho.