Meesho’s FY22 Loss Grows 6.5X To INR 3,247.8 Cr As Expenses Quadruple

Vidit Aatrey-led ecommerce giant Meesho saw its net losses widen by more than 6X in the financial year 2021-22 (FY22). On a standalone basis, the Bengaluru-based unicorn reported a net loss of INR 3,247.8 Cr during the period under review, up 550% from INR 498.6 Cr reported in the previous fiscal year.

The ecommerce unicorn’s total revenue jumped to INR 3,359.4 Cr in FY22, a 300% increase from INR 838.6 Cr it reported in FY21. Meesho also reported INR 3,232.3 Cr from its operations in the financial year ended March 2022, which is a 4X jump from INR 792.8 Cr it logged in FY21. 

The startup earns revenue from services it offers on its online marketplace, and initiates, facilitates and coordinates buying and selling of products. Meesho offers a range of products across categories such as clothes, electronics, beauty products, others on its website and mobile app.

The startup saw its total expenses soar to INR 6,607.2 Cr in FY22, up more than 400% from INR 1,337.3 Cr in FY21.  Meesho’s logistics and fulfilment expenses stood at INR 2,829.4 Cr in FY22 and contributed 43% to the startup’s total expenditure. In comparison, the SoftBank-backed startup spent INR 632.3 Cr for logistics and fulfilment expenses in FY21. 

Meesho has spent INR 2,579.3 Cr for advertising and sales promotion in FY22. This is a 508% rise from the previous fiscal year when Messho spent INR 424.1 Cr for the same expenditure. It must be highlighted that Meesho had partnered with 4 IPL franchises —Mumbai Indians, Royal Challengers Bangalore, Rajasthan Royals, and Gujarat Titans during Tata IPL 2022. 

Apart from this, the startup’s employee benefit expenses also stood at INR 509 Cr in FY22, a 241% jump from INR 149.3 Cr it reported last year. Employee benefit expenses comprises employee wages, PF contributions, gratuity, and other employee welfare benefits. 

Meesho’s EBITDA margin worsened from -58.39% in FY21 to -96.41% in FY22. The startup spent INR 2 to earn INR 1 from its operations in FY22.

Meesho was founded in 2015 by Vidit Aatrey and Sanjeev Barnwal. The startup, which was the  poster boy for social commerce in the Indian startup ecosystem, soon attracted global investors as it raised more than $1 Bn on the back of its business model. 

It is backed by marquee investors such as Sequoia Capital, SoftBank, Prosus & Naspers, and Meta (then Facebook), among others.  In 2021 alone, it raised $870 Mn in two rounds at a valuation of $4.9 Bn.

However, the startup has had its own share of trysts with different offerings. In late 2021, the startup forayed into the B2C business as its social commerce business was plagued by high marketing cost, dependence on influencers, and a lack of training for resellers to sell products. It also piloted its community-buying grocery vertical Farmiso in Karnataka in 2021, before expanding it to other states. 

Eventually, Farmiso was rebranded to Meesho Superstore earlier this year as the merger saw the consolidated company laying off 150 employees. However, the business was unable to sustain as in September this year, Inc42 exclusively reported that Meesho had shut operations of Meesho Superstore in every city except Mysore and Nagpur. 

Overall, Meesho joins the likes of Snapdeal which has been trying to grab a pie of the lucrative business-to-consumer (B2C) ecommerce market, which Flipkart and Amazon currently dominate.

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