Social commerce app Meesho spent Rs 11 Cr to earn Rs 6 Cr revenue in FY18

Social commerce startup Meesho, which has recently raised $50 million Series C round, has revealed its financial performance in the fiscal year ended on March 31, 2018. The Vivek Aatrey led company clocked Rs 6.01 crore in revenue in FY18, a 5X jump from Rs 1.21 crore in FY17.

In the latest reported financial statements, amount earned by providing application development services contributed the most to overall revenue with a share of 48.5 per cent (Rs 2.91 crore), followed by shipping fee contributing 30.6 per cent (Rs 1.84 crore), and commission contributing 20.8 per cent (Rs 1.25 crore)

To generate this revenue the firm spent Rs 10.98 crore, showcasing a 6.6X hike in expenses from Rs 1.66 crore figure in FY17. While the company spent Rs 1.38 to earn a rupee in FY17, that amount increased to Rs 1.83 in FY18.

While this is not a significant difference, it becomes a timely warning for the company to tighten its belt and manage its finances better and control its losses that grew 10.9X in FY18, rising up to Rs 4.97 crore from being Rs 46 lakhs in FY17.

Interestingly, the highest area of the expense for the firm changed from Employee benefit in FY17 (Rs 89 lakhs) to logistics expense in FY18 (Rs 3.88 crore). The former expense had grown 4.1X in FY18, compared to a 175X jump in the latter.

The online re-seller marketplace that invests Rs 7.5 crores in mutual funds, according to the filings had raised Rs 13.06 crore from its parent Meesho Inc, throughout FY18 (roughly approximating to $2 million). Since the end of latest fiscal year, the company has raised another Rs 47.75 crore (almost $7 million) from the same source via issue of equity source.

Meanwhile, the company has reportedly raised almost $65 million since October 2017, across three rounds - $3.44 million, $11.5 million, and $50 million. The participating VCs include SAIF Partners, Venture Highway, Y Combinator, Sequoia India, Shunwei Capital amongst others.

Kabir Misra, a former managing partner of SoftBank, through is new venture RPS Investment Fund had also poured in money in the company in the last round worth $50 million and wished to invest around $10-15 million further.

So far, the firm has been able to bag several rounds of money, but it remains to be seen if the firm manages to manage its finances before they go into a downward spiral.