Meesho recasts board ahead of IPO

Despite the changes, Prosus and SoftBank will continue to be key investors in the company.

Meesho has rejigged its board ahead of a planned initial public offering (IPO), essentially giving the larger shareholders more decision making abilities while reducing focus on the investors with lesser stake in the e-commerce startup, sources in the know told Moneycontrol.

From the investment side, Meesho’s board earlier consisted of representatives from Elevation Capital, Peak XV Partners, Prosus and SoftBank, as per regulatory filings. However, two of those four investors have given up their board seats in the recent weeks.

Sarthak Misra, Partner at SoftBank Investment Advisers, which holds under 10 percent in Meesho and Ashutosh Sharma, India Head - Investments and M&A at Prosus Ventures, an investor with 12 percent stake in the company, have given up their board seats as part of the restructuring, two of the persons cited above said.

While Prosus and SoftBank together holding a stake of around 22 percent in Meesho may seem significant, their share in the company is relatively lower than the total ownership of Elevation Capital and Peak XV Partners, the largest two investors in the e-commerce startup, put together.

To be sure, Peak XV Partners, which holds a 12.5 percent stake in the company, will continue to have its representative, Mohit Bhatnagar, Managing Director, Peak XV Partners on Meesho’s board along with Mukul Arora, Co-Managing Partner at Elevation Capital, the single largest shareholder with an ownership of 13.5 percent in Meesho.

Despite the changes, Prosus and SoftBank will continue to be key investors in the company.

Other changes

Along with SoftBank’s Misra and Prosus’ Sharma, Meesho is also succeeding former JP Morgan Chairman (South and Southeast Asia) Kalpana Morparia with Kimsuka Narasimhan, former Pepsico and Kimberly Clark (Asia) executive, sources told Moneycontrol.

After the three resignations, of Misra, Sharma and Morparia, Meesho’s board now consists of eight people: Founders Vidit Aatrey and Sanjeev Barnwal, Peak XV Partners’ Bhatnagar, Elevation Capital’s Arora, former Kimberly Clark executive Narasimhan, Jubilant Bhartia Group founder Hari S Bhartia, PhonePe non-executive Chairman of the board Rohit Bhagat, San Francisco-based AI company Ema's CEO Surojit Chatterjee, sources added.

While Meesho and Prosus did not reply to Moneycontrol’s queries at the time of publishing this story, SoftBank declined to comment.

Such moves, especially at Prosus and SoftBank, are common in the rup to the IPO of portfolio companies.

In the past, it has been common for SoftBank to give up its board seat in IPO-bound companies, such as Delhivery and others, ahead of their draft red herring prospectus (DRHP) filing as it looks to avoid a lock-in period for share sale and also the promoter tag.

These changes come just days after Moneycontrol reported that Meesho has completed its flip back to India from Delaware in the United States and is also set to pay $288 million in taxes for the re-domiciling.

The preparations are ahead of the company’s plans to raise as much as $1 billion through an IPO which will value the company at around $10 billion, as first reported by Moneycontrol.