Bengaluru-based social commerce startup Meesho has raised an undisclosed amount of funding from social media company Facebook. The deal size is said to be “very significant”, however, there is no official communication on the same.
Vidit Aatrey, cofounder and CEO, Meesho wrote that the investment will help it further its efforts to enable independent entrepreneurs to build businesses and grow their customer base via social channels. Prior to this round, the company has raised $65.2 Mn from investors such as Sequoia India, Shunwei Capital and DST Partners.
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.
It facilitates a three-way marketplace enabling resellers, SMBs, and micro-entrepreneurs across India to connect with potential buyers using social media. The company claims to have more than 15K suppliers and 2 Mn resellers across India.
How Meesho Fits With Facebook’s Plans?
In an interview with CNBC-TV18, Facebook India MD Ajit Mohan said that Meesho stood out from its peers in certain aspects. Firstly, the two founders had the right framework in terms of business building. “They were bringing a lot of passion and problem-solving and testing and learning approaches that we as a company like,” he said.
They also liked that the impact was in Tier 2 and Tier 3 cities. Further, Facebook believes it can be even more of an ally for India and fuel the India internet story and even more, the kind of impact that they are having in lighting up female entrepreneurship.
The attention to female entrepreneurship comes as Meesho claims that 80% of its users are women. “So the Meesho social commerce model is fuelling entrepreneurship as well as it is fuelling women entrepreneurs, Mohan said.
Mohan has repeatedly emphasised that the investment was with an eye on the impact of Meesho and not of transaction. Going forward, Facebook is looking to guide Meesho founders in terms of support they want to fuel this entrepreneurship model and they will see if there are opportunities for them to do things together.
Why Is Social Ecommerce Creating Buzz?
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 social ecommerce startups leverage the user bases of social media platforms such as WhatsApp or traditional media platforms to build ecommerce solutions for its customers which are more friendly and personalised. Even though they were expected to have lower acquisition costs, the results have been lukewarm.
The investment is also significant in the light that ecommerce companies in India are struggling. Some like Mumbai-based Craftsvilla have put themselves up for sale while others such as social fashion commerce startup Wooplr have shut shop due to mounting losses.
Paytm Mall is another ecommerce company that’s hit the wall in terms of growth. Backed by some of the world’s leading investors including Alibaba and SoftBank, the company is reportedly looking for a funds infusion even as it has had its fair share of problems such as firing employees for fraud.
But even as the sector has turned graveyard for some, other businesses have managed to carve a niche and grab their share of India’s ecommerce market which is projected to be worth $220 Bn by 2025.
A 2017 Zinnov Report expects that the online housewives 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 a culmination of efforts coming from Facebook towards Meesho’s growth, the social ecommerce industry is bound to get more exciting soon.
Meesho was part of the 2018 edition of the most coveted list of India’s most innovative startups — 42Next by Inc42.