SoftBank-backed Meesho is aiming to turn Ebitda (earnings before interest, taxes, depreciation, and amortization) positive by mid-2023 to prepare for its public listing, founder and chief executive Vidit Aatrey said in a company-wide town hall meeting.
Aatrey said the listing will be likely in Indian bourses as Meesho will be an advantage due to the uniqueness of the business as US bourses are crowded and investors tend to have lot more options around listed ecommerce businesses
The meeting recording, which was obtained by VCCircle, showed aggressive plans to turn Ebitda positive to go public- “We should put all of our efforts into the public listing. If we achieve Ebitda profitability then we can achieve successful listing"
Aatrey was also open to the dual listing. He said while giving examples of Indian companies like Infosys and HDFC which are listed in both Indian and US exchanges.
The company should focus on gaining a larger market share in India and should have a goal of onboarding a billion users, he also said the overseas expansion makes no sense as India’s retail market size is hitting up to $1 billion.
Aatrey refuting recent news reports around the funding crunch said that the company still has more than half of what was raised last year in two rounds. The current plans for public listing are due to the ambition of scaling while giving an example of how SEA Group’s Shopee was able to scale because they had access to public market capital.
While pressing on profitability, Aatrey said the markets are not rewarding growth over profitability unlike what was happening last year. Profitability will be the key to the next leg of Meesho’s journey, he said.
The broader market meltdown globally and in India has caused companies to push their public listings by over a year. Several tech firms, such as Paytm, Policybazaar and Zomato, which were listed in 2021, are currently trading well below their issue price.
Meesho has sellers mostly from tier-2 cities and targets customers in smaller towns. It garners nearly half of its sales from apparel. It also sells products such as kitchen appliances, jewellery, footwear and grocery. The startup has 700,000 sellers on its app and 125 million monthly active users.
Founded in 2015 by IIT Delhi alumni Aatrey and Sanjeev Barnwal, Meesho started as a social commerce firm before growing into an e-commerce firm to directly challenge the likes of Flipkart and Amazon. It also competes with DealShare and CityMall. In April 2022, Meesho laid off around 200 employees as it revamped its grocery vertical to reduce redundancies as part of a cost-cutting exercise.
The company raised over $870 million in funding through two tranches in 2021 from Fidelity, SoftBank and B Capital and was last valued at $4.9 billion in September 2021.
In April, Meesho integrated its grocery business Farmiso within its core application. The company rebranded Farmiso to Meesho Superstore.
It is also mulling ways to expand its grocery and live commerce segments, which are currently in an experimental stage.
Meesho reported revenue of around ₹793 crore in FY21, based on regulatory filings, which was earned from fulfilling order deliveries for sellers. The company has yet to announce its FY22 results. Companies need to file their FY22 annual statements by 30 September.
