SoftBank-backed Meesho losses halved to Rs 1,675 cr in FY23, revenue grew 77% to Rs 5,735 cr

L-R Vidit Aatrey, co-founder & CEO and Sanjeev Barnwal, co-founder & CTO, Meesho

Meesho, the low price e-commerce platform, said its revenue from operations grew 77 percent from Rs 3,232 crore in FY22 to Rs 5,735 crore in FY23, as existing customers transacted more on the platform and monetisation efforts yielded desired results during the year.

A broader category mix also gave a boost to the company’s top line. Even as Meesho’s revenue from operations grew, the company’s losses reduced in the previous financial year. In a press statement, Meesho said its loss narrowed 49 percent from Rs 3,251 crore in FY22 to Rs 1,675 crore in FY23. To be sure, Meesho is yet to file its final results with the Ministry of Corporate Affairs (MCA).

The Bengaluru-based company brought down its losses largely because of lower customer acquisition costs (CACs) and reduced spends on server and infrastructure components. CFO Dhiresh Bansal had earlier told Moneycontrol that Meesho had reduced its CACs over the past years. Meesho’s CAC was roughly at Rs 250 two years ago but was now down to around Rs 50-60.

Meesho has also reduced its cloud costs by at least 50 percent, as reported earlier.

The cost cuts, which included two rounds of layoffs, had improved Meesho’s unit economics, prompting its investors to bump up its valuation. Meesho was last valued at $4.9 billion when it raised $570 million in September 2021. Still, Fidelity Investments, the US-based Asset Management Company (AMC), had marked up Meesho’s valuation to slightly above $5 billion in August. 

The Bengaluru-based company was however valued at about $3-3.5 billion during a secondary round when WestBridge was eyeing a 1-2 percent stake in Meesho. Venture Highway, an early backer of the e-commerce company, diluted a part of its stake.

“Our performance in FY23, saw us achieve ambitious goals that we had set for ourselves. We were among the first movers to adopt a discovery-led product interface, keeping in mind the needs and preferences of our user base – Most of whom are new to online shopping,” Meesho said in a prepared statement.

Meesho said its strong performance continued even in the first half of the current fiscal. In H1FY24, Meesho’s revenue from operations stood at Rs 3,521 crore while it incurred losses of Rs 141 crore during the half of the current fiscal year. While the revenue was up 37 percent on a year-on-year (YoY) basis, losses narrowed 90 percent, Meesho said.

Also read: Meesho announces organisational changes as CXO set to depart

“The revenue from operations in just these six months exceeded the full year revenues of FY22. The business continued to demonstrate sustainable growth,” the SoftBank-backed company said on December 29.

“ Meesho has been able to optimise the Selling, General & Administrative expenses (SG&A) significantly on the back of its high mindshare with consumers resulting in organic traction as well due to the significant operating leverage inherent to a marketplace business,” the company concluded.