Surabhi Gorebal, Pune
Meesho CEO Vidit Aatrey claimed that the company might raise its next round of investment through an IPO on Saturday.
Sources from industry claim that Bengaluru-based Meesho has had difficulty raising its next round of investment during the fundraising winter, specifically in late-stage agreements, but Vidit Aatrey, co-founder and CEO, is unaffected. He believes that Meesho will not really need to raise a round.
“We are fortunate that we raised a substantial amount of money in 2021, much more than we needed. As of now, we don’t have any plans of raising money because we have more than enough in the bank, and can keep running the business in a very healthy manner for many years,” Aatrey said in an interview with Business Today.
He also mentioned that Meesho’s upcoming fundraising attempt might involve the public markets. “There is a good likelihood that our next round [of financing] would be an IPO. But the plan in 2023 is to get to profitability as quickly as possible. And once that happens, the need for external capital is very less,” he said.
Meesho, an e-commerce platform, secured its last fundraised funding, $570 million in a Series F round headed by Fidelity Investments and B Capital Group, approximately in September 2021 and a $300 million Series E investment headed by SoftBank Vision Fund in March 2021.
About $1 billion in venture capital received from a wide range of local and international investors, Meesho continues to be one of India’s most well-funded firms. According to Tracxn, its worth rose from $700 million to $4.9 billion between August 2019 and September 2021. Although venture capital funding in the beginning helped the company’s rapid expansion, its attention has not since turned towards profitability.
SoftBank and Prosus Ventures (formerly Naspers), two of Meesho’s major investors, are optimistic that the e-commerce business will become profitable “within months, not years.”
Sarthak Misra, Investment Director at SoftBank Vision Fund, stated in a separate interview with Business Today that Meesho is at a better position compared to many start-ups and smaller businesses given the strength of the balance sheet, giving it a runway of at least two years. Until then, it will be profitable. Their expenses have been under control. If we keep up the ongoing trends and the organic expansion of contribution margin, Meesho should turn a profit in 2023.