Social commerce startup Meesho has raised $125 million, led by South African media and internet group Naspers, with participation from US technology company Facebook and existing investors SAIF Partners, Sequoia Capital, Shunwei Capital, RPS and Venture Highway.
Former Vodafone Group CEO Arun Sarin also participated in the round.
In the current funding round, “more than 80% has come from Naspers and Facebook. This round has been done at a valuation of about $700 million,” said a person familiar with the development.
ET was the first to report on June 28 that Meesho was in talks with Naspers for a $120-130 million financing round. The Bengaluru-based company has raised more than $200 million till date.
Meesho plans to invest the funds to further build its technology platform, launch new categories, and go deeper into areas outside of India’s major metro regions not serviced by traditional e-commerce marketplaces.
“In the last few months, we have launched categories including cosmetics, FMCG, and travel packages. The focus is now on scaling these businesses along with existing ones across the country, primarily smaller towns and cities. This includes introducing more regional languages on our app (from seven currently), leveraging our referral program which is our biggest growth driver, and a mix of online and offline reach-out strategy,” Vidit Aatrey, cofounder and CEO, Meesho told ET.
The online marketplace connects resellers with suppliers, and is now moving to target retailers and small shop owners to increase its addressable market. Resellers on Meesho use platforms like Facebook, Whatsapp and Instagram to sell their products.
Meesho offers solutions for discovery, logistics and payments to enable easier transactions between resellers and buyers. The category is, however, plagued with high return rates of as much as 40-50%.
The startup claims that it has built a network of more than 2 million social sellers across 700 towns in India, as well as creating a distribution channel for 15,000 suppliers in traditional manufacturing hubs.
The new funds will enable the company to make inroads in areas outside India’s major metro regions, by creating more entrepreneurs, and as a result, reaching remote customers not serviced by traditional e-commerce marketplaces. The latest investment will also strengthen Meesho’s aim to grow its community of women entrepreneurs who have dreamt of running their own businesses but lacked the funds and expertise to do so.
For the fiscal year ended 2018, Meesho reported revenue of Rs 6 crore on a loss of Rs 5 crore. However, this was before the company raised growth capital.
Investors ET spoke to believe the company is at a $500 million GMV run rate. Atrey declined to comment on financial numbers.
After exiting Flipkart, Naspers has emerged as one of the most fervent backers of Indian tech startups, including backing ed-tech platform Byju’s and doubling down on food-delivery through Swiggy.
“Globally, Naspers identifies big areas of consumer spend that have not yet been significantly disrupted by technology and India e-commerce certainly fits the bill,” said Ashutosh Sharma, Head of India Investments, Naspers Ventures.
Meesho, founded by IIT-Delhi graduates Aatrey and Sanjeev Barnwal, competes with the likes of Mumbai-based Shop101 in India. Other global parallels in the social commerce space include Tencent-backed Koudai in China, which lets sellers set up a store within WeChat for users to make in-app purchases.