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Profitability first, then IPO, so you don’t have to sell your story much to the public: Meesho’s Vidit Aatrey

Aatrey’s comments come at a time when high-growth tech companies, which got listed on the bourses last year, including unicorns such as Paytm, Zomato, and PolicyBazaar, among others have been dumped by public market investors as these firms have never managed to show a company-level profit.

June 29, 2022 / 07:59 AM IST
Vidit Aatrey, Founder & CEO, Meesho

Vidit Aatrey, Founder & CEO, Meesho

Meesho will look to do a public listing only once it achieves company-level profitability as selling a story to public market investors becomes easier if a company has profit on its books, according to the social-commerce unicorn’s co-founder and chief executive officer Vidit Aatrey.

“We have taken a goal and that’s profitability, and only after that we will be doing an IPO,” Aatrey told Moneycontrol, speaking on the sidelines of T-Hub Innovation Summit.

“It’s not like we have to do it before it and then sell the story to the public. Our plan is to do it at the right time. Our goal is to still do it within the next two years, end of next year maybe, but that will depend on the market. No point in doing one if the market is not big, right? But our goal is to be ready (for IPO) by then as a company, we can be ready by the middle of next year or the end of next year,” he added.

Aatrey’s comments come at a time when high-growth tech companies, which got listed on the bourses last year, including unicorns such as Paytm, Zomato, and PolicyBazaar, among others have been dumped by public market investors as these companies have never managed to show a company-level profit.

Aatrey also said that the company is currently focusing aggressively on conserving cash. Meesho is confident of having a positive cash flow by early next year, and doesn’t have to pivot to save costs, he said. To be sure, Meesho had laid off about 150 employees earlier this year, in what the company called was a part of a ‘restructuring exercise.’ Aatrey also said that competition is lesser in the social commerce space.

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“If you look at last year, we raised close to a billion dollars. And we raised that so that we can be very aggressive in our business. Knowing what the environment is, we have scaled down our burn massively and we don’t need to spend as much as our competition,” said Aatrey.

“Competition is much lesser, people are not spending much in marketing online, so competition is lesser. So all these things have happened and so we don’t need to spend as much money. Internally, we have taken a goal of preserving cash and by early next year, maybe we could be cash flow positive,” the CEO observed.

Meesho, founded by Aatrey and Sanjeev Barnwal in 2015, is a social commerce platform, which lets individuals and small businesses to sell their products through resellers. The company counts Facebook’s parent Meta, Japan’s SoftBank Group, Sequoia Capital, Y Combinator, Naspers and Elevation Capital among others as its backers.

The company is valued at $5 billion currently but had reported a loss of nearly Rs 500 crore for 2020-21 (FY21), even as it saw its sales rising over 2x during the year.
Nikhil Patwardhan
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