Exclusive: Meesho eyes $4 Bn valuation as it prepares for consumer play

In just three months after its previous investment round, Meesho is back at fundraising, and this time with an aim to almost double its valuation. The social commerce platform is in talks to raise over $100 million in a new round from two new and existing investors, according to two sources aware of the details of the transaction. 

“Meesho is finalising a $100 million round from two new investors and existing backers including SoftBank and Prosus,” said one of the sources requesting anonymity. “The round will also have a significant secondary component.”

If the investment round goes through, it will be Meesho’s second fundraise this year. The company attained unicorn status in April when it mopped up $300 million in a round led by SoftBank. 

According to sources, Meesho is likely to be valued at over $3.5 billion in this transaction. “Meesho will be valued anywhere between $3.5 to $4 billion,” said the second source who also requested anonymity.  

This will be an almost two-fold jump in the company’s valuation as compared to its valuation in April: it had soared 400% to $2.1 billion then from $700 million in 2019.

“With this new round, Meesho will ramp up its consumer internet play and challenge Amazon and Flipkart in markets beyond top 10 and tier I cities,” added the person mentioned above.

Queries sent to Meesho, SoftBank and Prosus did not elicit an immediate response. We’ll update the post in case the company responds.

It’s worth noting that Meesho has championed the reseller model since its inception in 2015. However, since late last year, the company has also been experimenting with a new model where consumers can order directly from Meesho.

At present, the company is trying out a white label solution for direct orders from consumers. However, per sources, it’s likely to begin fulfilling these orders with full-fledged Meesho’s branding.

“Meesho has clearly established itself as the third-largest e-commerce company after Walmart (via Flipkart) and Amazon. There has been a lot of inbound interest from investors in Meesho as its volume peaked after the first phase of lockdown last year,” said the person quoted at the beginning of the story. 

Meesho is also one of the few e-commerce companies that claimed to surpass the pre-covid peak early this year.

As of now, the Vidit Aatrey-led company has raised over $490 million across several institutional rounds from the likes of SoftBank, Facebook, Elevation Capital, Sequoia Capital, Venture Highway and Y Combinator among others. 

While Meesho doesn’t have a strong direct competitor, it does compete with GlowRoad along with DealShare and CityMall indirectly. One of its early competitors, Shop101, was recently acquired by InMobi’s Glance. 

Entrackr had exclusively reported this on June 1.

Meanwhile, Flipkart recently rolled out its social commerce platform Shospy to test this emerging space. According to the Walmart-owned company, users of Shopsy will be able to share catalogues of products offered by Flipkart sellers.