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SoftBank Eyes Meesho Investment, Could Lead $200 Mn Funding Round

SoftBank Eyes Meesho Investment, Could Lead $200 Mn Funding Round

Facebook invested around $25 Mn in Meesho recently

The $100 Bn SoftBank Vision Fund is expected to invest $2 Bn - $4 Bn in India over the next two years

SoftBank may also be considering a change in its India investment strategy

After piling up its portfolio with top Indian startups in almost every sector, SoftBank seems to be eyeing Bengaluru-based Meesho. The Japanese conglomerate is reportedly looking to invest $200 Mn in the social commerce startup as part of its next funding round. Meesho recently gained attention as Facebook invested around $25 Mn in the company.

Meesho is an online reseller network for individuals and SMBs, who sell products within their network on social channels such as WhatsApp, Facebook, and Instagram. The company has so far raised a total of $90.2 Mn since its launch in 2015 by IIT graduates Vidit Aatrey and Sanjeev Barnwal.  The social commerce startup claims to have more than 15K suppliers and 2 Mn resellers across India.

The $100 Bn SoftBank Vision Fund is expected to invest $2 Bn – $4 Bn in India over the next two years. “We will also make follow-on investments aside of fresh ones when our portfolio firms require capital,” Rajeev Misra, head of the SoftBank Vision Fund, had said at the time of the launch of the second fund last month.

If the Meesho deal comes through, it would be a relatively smaller cheque size as compared to the billion-dollar investments SoftBank has done in its earlier deals such as Paytm, Ola, Flipkart, and more. SoftBank’s other key investments in India include Hike, FirstCry, Grofers, Delhivery, Automation Anywhere, and Paytm Mall. It was said to be in talks to launch an initial public offering of its $100 Bn SoftBank Vision Fund.

This implies that SoftBank is considering a change in its India investment strategy, thereby backing startups at the growth stage, rather than the late stage.  A similar investment was seen as Walmart invested $50 Mn in fresh produce supply chain startup NinjaCart earlier this month.

According to Statista, over 2.14 Bn people worldwide are expected to buy goods and services online by 2021. Definitely, peer influence will play a critical role in here. Further, social platforms having a large user base like WhatsApp (200 Mn), Facebook (241 Mn) and Instagram (72 Mn) will act as a potential catalyst to fuel this growth. And a February 2019 report by Deloitte India and Retailers Association of India (RAI) says that 28% millennials purchase products due to social media recommendations, and 63% millennials stay updated on brands through social media.

That’s exactly the network that Meesho is trying to tap and SoftBank funding could be seen as validation for the sector, which has suffered a reputation damage thanks to startups such as Wooplr shutting shop.

Meesho was part of the 2018 edition of the most coveted list of India’s most innovative startups — 42Next by Inc42.