Social commerce platform Meesho on Thursday said it has raised $570 million led by Fidelity Management & Research and Facebook co-founder Eduardo Saverin’s B Capital Group, catapulting the Bengaluru-based startup’s valuation to $4.9 billion.
In April, Meesho became a unicorn after it raised $300 million led by Japan’s SoftBank Group Corp. The fund-raise then valued it at $2.1 billion--a three-fold jump from its previous funding round of $125 million in 2019 when it was valued at $700 million.
Existing investors Prosus Ventures, SoftBank Vision Fund 2 and Facebook also participated in this round. Some of the other new investors include Footpath Ventures, Trifecta Capital and Good Capital.
With the new round of funding, Vidit Aatrey, CEO of Meesho said, the company will double down on product and tech capabilities.
“Our focus will be on India, so we will continue to invest, to go deeper into the country, and find more people to come and sell on the platform. We plan to triple our tech and product team over the next 12 to 18 months. Our broad goal is to get 100 million monthly transacting customers on our platform by end of next year. At the beginning of this year, we started our grocery vertical, and we plan to double down significantly and grow this aggressively,” Aatrey said in an interview.
Since the last round of funding in April, Meesho has recorded 2.5x growth in order volume and added new product categories to its roster including sports and fitness, pet supplies, and automotive accessories.
“We have evaluated e-commerce opportunities across emerging markets and are excited about Meesho’s focus on strong unit economics and a consumer-first approach. We are excited to partner with Meesho and its exceptional team that is democratizing e-commerce for a billion internet users across the country. Meesho’s business model has an incredibly compelling value proposition with entrepreneurs, end customers, and suppliers consolidating on one platform,” said Kabir Narang, founding general partner at B Capital Group.
Aatrey said the focus of the company is growth and expansion. “It’s an amazing thing that mature companies went public in India and abroad. It's a strong validation to the entire ecosystem. I don't think we plan do an IPO anytime soon, because we are just focused on growth right now. We believe we will be very opportunistic about it, so whenever is the right time, when we feel we are ready for that, we will do it, but not anytime soon,” he said.
“We are in the growth phase; overall profitability is not the biggest priority for us. But the day we want to, we can overall as a company become profitable But right now, the room for growth is so much that it makes no sense for us to just go and become profitable".
Meesho’s latest fund-raise also comes at a time when it is battling a spate of fraudulent and unconsented orders on its platform.
Aatrey recently said the company has implemented a number of steps, including the appointment of consultant Deloitte, to conduct a forensic audit and investigate the issue. “We now have stronger policies, but we are not getting complacent and are very focused on making sure that at all points of time, no person is mistreated by any user on the platform. One thing I would like to admit is, that is important to us to make sure we build the right platform where we are doing the right thing for everyone.”