IPO-hopeful Meesho, the low-cost e-commerce marketplace, has changed its logo after nearly eight years. The company has evolved from being a platform for women-centric fashion products to one that now has almost the same number of male and female shoppers, as well as an increasing number of young buyers, Vidit Aatrey, co-founder and CEO of Meesho told Moneycontrol.
The new logo retains the existing "m" but features a combination of new colours. The old logo was white text on a pink background.
“Earlier, we were very focused on women entrepreneurs on the platform. Now the platform is more inclusive as it serves consumers across all genders. We have a significant base of people between 18 and 25 years of age, and that segment is growing rapidly. That’s usually the group that comes to shop online first, and we want to ensure they resonate with us,” Aatrey said.
Meesho has added several categories like books, automotive parts and more in its attempt to become a horizontal platform.
“With the brand refresh we’re essentially aligning our identity to what the business is today,” he added.
Branding experts like Samit Sinha of Alchemist Brand Consulting, have stated that such exercises are common, where companies tweak logos to communicate to customers that the startup has evolved and now offers additional features. And if soft changes aren’t made after years of existence, it means it’s just business as usual for the company, which can be a tricky spot.
The company is aware that it will take a while before customers get used to the change completely. “...it obviously takes some time, we will have to get used to it. And whatever it takes for us to kind of get there, we will do,” Aatrey said.
That would mean spending more on marketing at a time when several new-age companies are cutting back on marketing spends as capital becomes difficult to access. However, Aatrey said that while the company was becoming more prudent, it will not stop spending on growth.
‘Will not raise capital’
Thanks to recent belt-tightening measures, such as two rounds of layoffs and reduced spending on cloud services, among other steps, Meesho has reduced its monthly cash burn from over $40 million to around $4 million. As a result, Meesho will not raise capital, according to Aatrey.
“We’ll be profitable in the next quarter or two latest, at a company-wide level where we report a profit after tax (PAT) and that means there is no need to raise capital at all,” Aatrey said during the interview with Moneycontrol.
“At any point in time, if we still need to raise money, we'll not raise primary capital. Frankly, times are very different. What could still happen is that we keep creating ESOP buyback opportunities in the future, but still don't need capital as a business. So, randomly diluting the cap table when we don't need money, is a really bad financial decision,” Aatrey added, possibly because valuations aren’t as favourable as before.
In fact, last month Fidelity Investments, an investor in Meesho, cut the company’s fair value by 10 percent, which effectively valued the startup at $4.4 billion, down from around $4.9 billion in September 2021. Meesho isn’t the only one, several investors have marked down valuations by anywhere between 10 and 70 percent for large startups like Byju’s, Oyo, Swiggy, among several others.
“...the macro climate (has) undeniably and considerably changed…we have had to accelerate our timeline to profitability as part of Project Redbull, while readjusting our gross merchandise value (GMV) growth goals to 30 percent YoY,” Aatrey told employees in an email last month, which informed them about 251 job cuts. The GMV growth was at 30 percent after growing 10X from 2020 to 2022, his email said.
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