Source: ettech.com
Social commerce startup Meesho has raised $570 million in a round led by US asset manager Fidelity and Eduardo Saverin’s B Capital. Existing investors SoftBank Vision Fund, Prosus Ventures and Facebook also participated. Other new backers include Footpath Ventures and venture debt fund Trifecta Capital, which has made an equity investment.
We reported on September 24 that the startup was in talks to close a new financing round involving Fidelity and B Capital.
Valuation: The funding ascribes the company a valuation of $4.9 billion, a significant jump from its $2.1 billion valuation when it raised $300 million from SoftBank Vision Fund in April.
Meesho will use the money to double its research and development team and acquire more users. It will also invest a significant chunk in its grocery marketplace Farmiso, which it launched earlier this year.
Growth: Cofounder and chief executive Vidit Aatrey told us that 15 million Meesho users clocked about 45 million orders in August, up from 20 million orders in March. The company said. In the past five months, 40% of its new users were also first-time e-commerce users, Aatrey wrote in a tweet on Thursday. The firm is aiming for an almost seven-fold increase in its monthly transacting customers to 100 million by December 2022.
Yes, but: We reported last week that Meesho currently spends a whopping $20-25 million a month to acquire new users.
Business model: The company operates on the community group buying model, giving resellers—mainly housewives and small businesses—a platform for their products on social networks such as WhatsApp and Facebook. Pioneered by DealShare, this model allows consumers from middle and lower-income groups to buy goods in bulk at huge discounts.
“When you leverage the community leaders model, you are able to serve this customer with very low ticket sizes, and offer them pricing while having a very strong unit economics base. We will continue to focus on small towns and cities and capture the entire online grocery demand,” Aatrey said.
Meesho’s D2C play: The company was founded in 2015 by Aatrey and Sanjeev Barnwal as a reselling platform for women entrepreneurs. This year, it began to focus on selling directly to consumers and compete directly with Flipkart and Amazon India, we reported on April 13.
“A unique thing about our business is we can tap direct consumer demand and reach out to those consumers who are still not comfortable buying directly from us,” Aatrey added.
