Meesho raises $275 million from investors, eyes more capital infusion

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

E-commerce startup Meesho has raised $275 million from investors, as per regulatory filings with the Securities and Exchange Commission (SEC). The capital infusion is part of a larger ongoing round at Meesho.

Moneycontrol was first to report that Meesho, which was initially in the market to raise $300 million, has seen increased investor interest and can potentially increase the round size to as much as $500-650 million. The talks are still ongoing and the final amount will be decided in due course.

While the filings did not reveal more details, SoftBank, Prosus, Elevation Capital, Peak XV Partners are some of Meesho's existing investors. It is also in talks to raise more from new investors.

The round, a mix of debt and equity, will also see Tiger Global ending its hiatus and returning to invest in Meesho for the first time. Of the total amount, the primary capital of around $300 million will be used to pay off taxes that arise from flipping the company’s base back to India from Delaware ahead of an IPO in India. The remaining will be the secondary component, as reported by Moneycontrol earlier.

The round values Meesho at $3.9 billion, 20 percent lower than the $4.9-billion valuation it commanded during its previous fundraise in 2021. The reduction in value comes after Fidelity cut Meesho’s valuation to $3 billion, Moneycontrol reported in January.

Meesho did not offer comments for the story.

Report card

The company, which competes with Walmart-owned Flipkart and Amazon, slipped into break-even in Q3FY24 after recording a profit of $5 million in Q2FY24, according to an internal set of documents that it shared with existing and potential investors, Moneycontrol reported earlier.

The dip in profit was because of higher operational costs. Employee stock option (ESOP) spends also weighed on the performance during the period, the documents showed.

The break-even quarter means Meesho has not maintained a streak of profitability, which came for the first time in Q2FY24.