Meesho, the Indian social commerce with 150 million transacting users, secures $275 million in new funding

Meesho, India’s leading e-commerce startup with around 150 million transacting users, has secured $275 million in a new round of funding, exposed in the submission of securities.

The new financing is part of a larger financing round, which is likely to include secondary transactions and grow to more than $500 million, people familiar with the matter said.

The Bengaluru-based startup, which operates a social commerce platform of the same name, has been valued at about $3.9 billion in new funding, the people said, requesting anonymity because the deliberations are still ongoing. The startup that has raised over $1.2 billion to date was valued at $4.9 billion in a previous funding round in September 2021.

WestBridge Capital and Norwest Venture Partners were among the investors exploring the possibility of buying a stake in Meesho in recent quarters. WestBridge bought Meesho shares last year of Venture Highway, an early backer of the Indian startup, was first reported by TechCrunch. (American investor General Catalyst is separately in negotiations to take over Venture Highwaypreviously reported by TechCrunch.)

Meesho — which counts Meta, Fidelity, Peak XV, Prosus Ventures, B Capital and SoftBank among its backers — is one of the fastest-growing e-commerce startups in the country. His The GMV rate was more than 5 billion dollars since the beginning of this year, according to Bernstein analysts.

Meesho has successfully captured the attention of value-conscious buyers from the Tier 2+ market with its attractive pricing and diverse unbranded range. The startup’s value proposition seems to be resonating well with the low- to middle-income customer groups, which make up the bulk of India’s consumer class.

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With 440,000 annual seller transactions and over 120 million product listings, Meesho boasts one of the broadest assortments across all platforms, catering to the complex and heterogeneous preferences of the Indian market, Jefferies wrote in a recent note to clients.

Traditional e-commerce platforms in India are primarily focused on high-income consumers and branded suppliers, resulting in an average order value (AOV) well in excess of INR 1,000 ($12). In contrast, Meesho’s AOV is below INR 350.

«Meesho’s algorithm prioritizes ads by considering multiple factors including seller rating, product rating, customer reviews, past customer purchase behavior, product popularity, etc. Therefore, price also affects the visibility of a product listing in the marketplace,» Jefferies analysts wrote.

“Meesho’s shipping fees are much lower than others, which allows the platform to offer lower prices to customers compared to the competition. To reduce costs, Meesho follows an asset allocation model and outsources delivery. Meesho has almost a half share of India’s annual 3PL e-logistics shipment.”

But the competition is heating up. Amazon India recently launched Bazaar, a «specialty store» that offers affordable and trendy fashion and lifestyle products. Economic Times first reported on new financing.

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