 "US-based investor Fidelity increases Meesho's valuation by 14.3%")
US-based investor Fidelity has increased the face value of its investment in e-commerce firm Meesho in its books by 14.3 per cent to $43.24 million as of July, as per its latest filings with the Securities and Exchange Commission. Earlier this year, Fidelity reduced the fair value of its investment in the Bengaluru-based company to $37.84 million as of March 31, filings showed. With Fidelity's latest markup, Meesho is now valued at around $5.04 billion.
In September 2021, Fidelity led a $570 million round in Meesho along with B Capital Group, a venture capital firm co-founded by Facebook Co-Founder Eduardo Luiz Saverin. Following the fund-raise, the company's valuation more than doubled to $4.9 billion in less than five months. Existing investors Prosus Ventures (formerly Naspers Ventures), SoftBank Vision Fund 2, and Facebook also participated in this round.
The markup by Fidelity comes at a time when Meesho recently said that it has achieved profitability in July at the consolidated profit after tax (PAT) level, on the back of an uptick in order volumes and revenue, and cost cuts.
"As the first horizontal e-commerce platform in India to achieve profitability, we remain committed to sustainable growth, democratising e-commerce for all, and unlocking the true potential of India's heartland," said Vidit Aatrey, chief executive officer and founder of Meesho.
The slim profit in July for the Bengaluru-based firm accounted for all costs across all divisions and categories of the company, including employee stock ownership plans. The firm declined to reveal the PAT figure but said it was in "single digits", indicating it was under Rs 10 crore.
Dhiresh Bansal, chief financial officer at Meesho, recently said that over the past 12 months, Meesho has experienced significant growth, with a 43 per cent increase in order volume, culminating in over a billion orders.
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Bansal said revenue grew by 54 per cent over the past 12 months, propelled by a substantial increase in order volumes and monetisation rate. "Meesho recorded $400 million in revenue from January to June 2023," said Bansal. "We anticipate ending the year with an annualised revenue exceeding $800 million."
The company is targeting a revenue of Rs 10,000 crore by 2025. The firm began focusing on profitability last year and claims to have turned a profit, a significant industry milestone, ahead of the projected timeline of October-December 2023.
Currently, Meesho processes 3.5 million orders daily. The firm attributes its profitability to a focus on capital efficiency and an asset-light business model.
According to a recent Jefferies report, Meesho is experiencing fast growth and improving profitability in a highly competitive market, potentially reaching break-even ahead of larger rivals like Flipkart and Amazon in India. While smaller in size (in terms of gross merchandise value) than the Flipkart group and Amazon India, Meesho's average monthly active users count is about 55 per cent of these incumbent players. The report highlighted that Meesho had an impressive 120 million average monthly active users on its platform during the calendar year 2022.