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Real change in value only about 6%, it's par for the course: Meesho CFO

Bansal also said the company was aiming to be profitable within the current fiscal year (FY24) on net profit basis

Meesho app
Ishita Ayan Dutt Kolkata
3 min read Last Updated : Jun 01 2023 | 7:16 PM IST
The markdown in valuation of homegrown e-commerce marketplace, Meesho, was “par for the course” given the trend in the e-commerce industry, Chief Financial Officer, Dhiresh Bansal, said.

The comment was in response to queries on a cut in valuation by Fidelity Investments, a prominent investor in the company. According to regulatory filings with the US Securities and Exchange (SEC), the investment firm has marked down Meesho’s valuation by 9.7 per cent to $4.4 billion as of March 31.

Meesho’s last fundraise of $570 million was in September 2021 at a valuation of $4.9 billion. It was led by Fidelity and B Capital Group. 

During a media interaction, Bansal said a lot had changed in the world since then. In the broader e-commerce industry globally, the valuation of listed players had come down by 50-70 per cent in the last two years.

“Our value change is about 10 per cent, of which about four per cent is because of ESOP issuances. So the real change in value is only about six per cent, which we feel is par for the course,” Bansal said.

The broader industry had seen multiple changes, he pointed out. “Six per cent is something that happens in a listed company almost on a daily basis.”

Bansal also said the company was aiming to be profitable within the current fiscal year (FY24) on net profit basis.

Between January 2022 and the last quarter, the company has cut down cash burn by close to 90 per cent. “For some of the months… even in the last six months we have already been cash flow positive,” he said.

Meesho focused on increasing revenues from various services provided to sellers and also optimised cost to achieve it. “There were a bunch of projects that we ran inside the company optimising cost. And we continue to be on this path.”

Last month, Meesho announced a layoff. Bansal said a restructuring was done where some functions were impacted. “We had to let go of about 250 people.”

The headcount he said was back to January 2022-level. Meesho has close to 1,300 staffers in its corporate business, with indirect employees the number would be 10,000.

From the middle of last year, Meesho started changing gears to focus on profitability. In FY22, losses were about Rs 3,251 crore and the expectation is that it would be halved in FY23. 

The company has an IPO in sights, possibly in FY25, but that is subject to becoming profitable. “We want to be profitable before going for an IPO,” Bansal said. The other caveat is that market conditions should be right. “There is no pressing rush from our side or the investors’ side,” he said.

Meesho had revenues of about Rs 3,200 crore in FY22, which was expected to grow about 80 per cent in FY23. In FY25, it was aiming for Rs 10,000-crore revenues. The current GMV is about $4.6 billion, Bansal said.

Topics :Meesho