Meesho’s Early Investors Consider Secondary Sales At $3-$3.5 Bn Valuation

Angel investors and early institutional shareholders of ecommerce unicorn Meesho are reportedly in discussions with potential investors to divest their stake. WestBridge Capital and Norwest Venture Partners are reportedly among the investment firms engaging in discussions with Meesho’s early investors.

As per ET’s report, talks are underway for a transaction at a valuation ranging between $3-$3.5 Bn, but this figure may change. The publication further said that WestBridge has expressed interest in acquiring more shares in Meesho, while Norwest Venture Partners has also participated in the discussions.

The ongoing conversations primarily revolve around the negotiation of deal pricing, with early investors expressing their desire to exit the investment at this juncture.

It is to be noted that investment firm WestBridge Capital acquired a stake in the ecommerce unicorn in a secondary transaction from its early and long-term backer Venture Highway in October. Venture Highway sold a part of its stake in the ecommerce startup to earn over 50X return.

Venture Highway is reportedly considering the sale of its remaining 1% stake in Meesho during this round of transactions.

Founded in 2015 by Vidit Aatrey and Sanjeev Barnwal, Meesho is backed by other marquee investors such as SoftBank, Peak XV, Fidelity Investments, Prosus & Naspers, and Meta.

The startup, once hailed as the poster child of social ecommerce, made a strategic pivot in 2022 to become a marketplace. This move places the company in direct competition with industry giants such as Flipkart and Amazon. The company is best poised to disrupt the duopoly of Amazon and Walmart-owned Flipkart, as per analysts.

As we reported this week, analysts believe Meesho’s zero commission model for sellers who offer unbranded products targeted at consumers from middle-low income households has worked for the Bengaluru-based ecommerce unicorn which has captured 7% of the ecommerce market share in India.

The ecommerce major was the brightest star in Prosus’ India portfolio in the first half (H1) of the financial year 2023-24 (FY24). As per half-yearly financial data released by Prosus, Meesho clocked an internal return rate (IRR) of 32% for the investor.

Meesho reported an operating revenue of INR 5,735 Cr in FY23, a 77% increase over INR 3,232 Cr in the previous fiscal year, it said in a blog last week.

Fashnear Technologies, the parent entity of Meesho, reported a net loss of INR 1,675 Cr in FY23, a 48% drop from INR 3,248 Cr in the previous year.

However, Meesho is yet to file its financial statements for the financial year 2022-23 (FY23) with the Ministry of Corporate Affairs (MCA).

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