Social commerce platform Meesho has received $192 million from its parent entity, Meesho Inc. In September 2021, Meesho had raised $570 million in a funding round led by Fidelity Management and Eduardo Saverin’s B Capital Group at a post money valuation of $4.9 billion.
The board at Meesho has passed a special resolution to issue 6,512,342 equity shares to its US based parent entity Meesho Inc at an issue price of Rs 2,408 per share to raise Rs 1568.2 crore or $192 million.
The infusion is likely to be used to ramp up its scale during the festive season. E-commerce marketplaces such as Amazon, Flipkart and Meesho see a sharp rise in their volume during the festive seasons (Dussehra and Diwali). According to Meesho, it processed a record 87.6 lakh orders on the first day of its flagship festive sale event — the Meesho Mega Blockbuster Sale. Tier II, III and IV cities accounted for 85% of the total volume.
Started as a social commerce company, Meesho pivoted to become a full fledged e-commerce marketplace last year. The company now directly competes with Amazon and Flipkart. Of late, Meesho has been finding it tough to raise a new round as the funding environment has turned tepid in the past six-eight months. According to Entrackr sources, it has cut down cost by about 50% and currently has a monthly burn of $20-25 million.
Meesho is yet to disclose its financial number for FY22, its revenue from operations grew 2.6X to Rs 793 crore in FY21 from Rs 307 crore during FY20. As per the company’s annual financial statements with the RoC, its losses surged 62.6% to Rs 498.6 crore in FY21 from Rs 306.7 crore during FY20.
The SoftBank-backed company is eyeing to reach 100 million monthly transacting users by December 2022. It also ventured into grocery last year but it didn’t work out and the company reportedly suspended grocery delivery service in several cities. Meesho also laid off hundreds of employees this year to cut costs and extend the runway.
Source @Entrackr
