Note to Readers: Germ of an Idea is a series about the entrepreneurial idea - how it was conceived, shaped and launched, detailing the early days filled with uncertainty and apprehension, the bold steps taken and the eventual success. The series hopes to inspire thousands of potential Indian entrepreneurs who are on the cusp of starting-up or have ventured recently or are in schools and colleges dreaming of turning founders.
Vidit Aatrey and Sanjeev Barnwal, the cofounders at Meesho, were wing mates at the Indian Institute of Technology (IIT) Delhi hostel, with their rooms located diagonally opposite each other. Theirs is a story of friendship that kicked off on the first day of college and continues to this day. During the toughest of days of their entrepreneurship journey, they believe it’s their bonding that pulls them through.
Its nimbleness is reflected in the fact that it has one of the lightest apps in the e-commerce world (14.5 MB). The android application package (APK) size has a direct bearing on the rate of installation of apps in smaller town and cities. Storage space is a matter of concern for many mobile phone users in these areas, and a light app helps.
Meesho essentially operates as a marketplace that connects suppliers and resellers with customers on WhatsApp, Facebook and Instagram. When they started the company in 2015, most of what was available online was branded and sold to larger cities and metros. Most of that consumption was dominated by smartphones, other electronic goods and fashion products. Meesho wanted to change that around and democratise internet commerce by focusing on small businesses. That was the vision.
The germ
Sanjeev had to cross-check about a start-up from whom he had an offer when he was working with Sony. He called up Vidit to figure out the details. Vidit’s immediate response was: “Why are you looking to join a start-up; why can’t we start one?”
This conversation happened in May 2015, and by June, they had both put in their papers. Vidit was at InMobi in Bangalore and Sanjeev was in Tokyo with Sony. Sanjeev flew into Bangalore from Tokyo. The mission was on.
“Our jobs were fine. We were doing well for ourselves. But we weren’t sure what the next big step in our lives would be,” says Sanjeev. “Somewhere there was this desire to create something that would have a big impact. That was the inspiration.”
There were two aspects the founders were clear about. The problem they set out to tackle should be a large-scale one that affects more than a 100 million people and the problem area should be something that they relate to and feel for. Keeping this as a filter, Vidit and Sanjeev created an excel sheet of ideas.
The duo knew that India is a ‘small-business’ nation. “About 85 percent of retail that happens in India happens through small businesses. Many of them didn’t sell online before 2015,” says Vidit. “So, we had these numerous small, unorganised and unbranded businesses that didn’t want to explore the online opportunities. They were selling within their own communities and in their own locality. We sensed there was tremendous scope for growth in this space. So, we were like, why can’t we pick up this problem and solve?”
There were 60-70 million small businesses in India that kept their game exclusively offline and that was a market that was waiting to explode online. The following was the problem statement they charted – ‘How do we bring small businesses in India online?’
The early days
Both Vidit and Sanjeev were tremendously excited about the possibilities. They knew that they were after a pot of gold. There was a clear opportunity for growth and scale. Through Meesho – meri shop put together into a single word – they wanted to give an online shop to every small business in India.
But they didn’t have a global model to emulate. “That’s why we struggled to raise money in the beginning. At that time, entrepreneurs used to raise money saying that they are Amazon/Uber, etc., of India. But when we went out, no one could find a parallel to this from the West because West doesn’t have the same problems. It was a struggle,” says Vidit. “But now a lot more companies are looking to solve problems specific to India.”
With monthly salaries a story of the past, their income streams had dried up. Vidit was living in an upmarket residential complex in the Sarjapur area of Bangalore. The friends realised that they had to bring down their lifestyles by a notch or two. So, they started to search for more economical options. “That was the first time we had to get used to a small house, after we left college. But we kept going. Our small dining table became our office. We used to spend 15-18 hours there on a daily basis,” says Sanjeev.
That was the start. In the morning, both would head to various shops, take pictures, edit and upload them on their site. Then they would pick up the orders from the shop and deliver them to the customers.
“Whatever time was left during the day, we would work on the product. Sleep was a luxury back then,” says Sanjeev. “In the beginning it was just the two of us. From Day 1, our understanding of the consumers was good, we felt. Once we identified the problem, we quickly went after it, keeping the team motivated. It was all about speed and understanding the consumer.”
The founders took some time to coin the name Meesho. When they started, the company was called Fashnear. “In the beginning it was hard to convince shop owners. Many of them were in the older age bracket and were in a comfort zone. That was the biggest challenge. But once they started experiencing the power of technology, there was no looking back,” says Vidit.
Raising funds, however, was proving to be more difficult than expected. Initially, Vidit and Sanjeev felt they could raise the amount in three-four months. But when they started pitching, they realised that the angel investors were not interested. “We pitched to over 50 investors in Bangalore,” says Vidit. They would look at the news articles and reach out to investors on LinkedIn or even cold call them. But the ice didn’t break. Finally, Rajul Garg, an angel investor and an IIT-Delhi alumnus, wrote them a cheque. The founders moved to Delhi for two weeks to pitch to investors there. “Soon, we received 300% of the commitment we had hoped for,” says Vidit.
And once investor Neeraj Arora came on board, the ship started to move ahead with pace. Meesho today counts Facebook, Sequoia Capital, SoftBank, Y Combinator and Elevation Capital as its investors.
The backstory
Sanjeev came from a small town in Jharkhand. “Delhi itself was overwhelming for me,” he says. Sanjeev and Vidit skipped classes and had a lot fun gaming. “Those were very different days. We fared well in exams, though.”
Says Vidit, “I met him on the first day at hostel. As freshers you try different things. We tried to do street plays together. Sanjeev was prone to getting cold during the Delhi winter and he got even more sick preparing for plays shouting his lines out. We partied and celebrated together.”
When Vidit landed his first job with ITC in Chennai, he was posted in their packaging division. After some time, he felt a certain degree of FOMO. “I felt a bit left out. My friends were talking about the fast-moving tech scene in Bangalore. I had heard of people being given higher responsibilities very early in their careers,” he says. He asked a friend to refer his name at InMobi.
Meanwhile, Sanjeev was working in Sony’s cybershot camera division. This was in 2012. “I was learning some basic Japanese too,” he says.
Vidit had no plans to launch a start-up when he was in college. “Even while I was working for ITC, I had no such plans. It’s only when I went to InMobi, a few realisations happened,” he says.
It was around this time he realised how technology can create a lot of value in a very short time. Also, he saw that one doesn’t need hundreds of crores in capex to start. “People like you and me have started-up. So, I was like why not? Maybe I never had an aspiration but we were seeing what was happening around,” says Vidit. “In any case we were 24-25 years of age and there was not much to lose. Even if nothing worked out, we could always come back. That’s what pushed me to explore.”
The road ahead
Meesho became a unicorn in April 2021 after it raised $300 million in a funding round led by SoftBank, valuing the company at $2.1 billion. Later in the year, the Bangalore-headquartered firm raised $570 million in its Series F round, thus doubling its valuation in less than six months, to $4.9 billion. It’s on an accelerated growth curve.
The founders believe that a strong product-market fit is an essential component while scaling. One can’t afford a leaky bucket that loses clients continuously. “We also set the right culture early enough. We created processes that were replicable and scalable on a daily basis,” says Sanjeev. “We believe culture can’t be defined, only derived. We make choices unconsciously that eventually leads to a particular culture. But culture is something that we keep revisiting; it can’t be cast in stone. It’s a living organism.”
The short-term objective in 2022 is to get to 100 million monthly transacting customers. “It’s quite aspirational,” says Vidit. The company has 30 million monthly transacting customers now. The bathi is burning bright.
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