What Are Zombie Unicorns & Why Meesho Is Called As Zombie Unicorns By Indian Media?

What Are Zombie Unicorns & Why Meesho Is Called As Zombie Unicorns By Indian Media?

 

A zombie unicorn is a term used to describe a startup company that has achieved a valuation of over $1 billion (unicorn status) but is not profitable and is burning through cash. These companies are often able to stay afloat for extended periods of time by raising more money from investors, but they are ultimately unsustainable and will eventually fail.

The term “zombie unicorn” was first coined in 2016 by venture capitalist Mike Maples Jr., who argued that the rise of these companies was a sign of the excesses of the tech startup ecosystem. He said that zombie unicorns were “companies that are technically alive, but they’re not really living. They’re just sort of shambling along, taking in money and not really producing anything.”

The number of zombie unicorns has increased in recent years, as the tech startup ecosystem has become more competitive and investors have become more willing to throw money at unproven companies. This trend has been exacerbated by the COVID-19 pandemic, which has made it more difficult for startups to generate revenue.

The rise of zombie unicorns is a concern for investors and entrepreneurs alike. Investors are worried that they are wasting their money on companies that are not viable, while entrepreneurs are concerned that the zombie unicorn phenomenon is making it more difficult for legitimate startups to get funding.

There is no easy solution to the problem of zombie unicorns. Some experts have suggested that investors should be more careful about the companies they invest in, while others have called for more regulation of the tech startup ecosystem. It is likely that the problem of zombie unicorns will continue to be a challenge for the tech industry for some time to come.

Here are some of the characteristics of a zombie unicorn:

They have a valuation of over $1 billion.
They are not profitable.
They are burning through cash.
They are reliant on investor funding to survive.
They are not growing their business.
They are not innovating.
They have a poor management team.

 

Meesho is called a zombie unicorn because it has achieved a valuation of over $1 billion (unicorn status) but is not profitable and is burning through cash. In 2022, Meesho’s losses were estimated to be around $45 million per month. The company has raised over $1 billion in funding from investors, but it has yet to turn a profit.

Meesho is also facing increasing competition from other e-commerce platforms, such as Amazon and Flipkart. This competition is making it more difficult for Meesho to grow its business and generate revenue.

As a result of these challenges, Meesho has been forced to lay off employees and cut costs. The company has also been forced to change its business model in an effort to become more profitable.

It is still too early to say whether Meesho will be able to turn its fortunes around. However, the company’s current financial situation and the challenges it is facing suggest that it is at risk of becoming a zombie unicorn.

Here are some of the reasons why Meesho is considered a zombie unicorn:

It has a valuation of over $1 billion but is not profitable.
It is burning through cash at a rapid pace.
It is reliant on investor funding to survive.
It is facing increasing competition from other e-commerce platforms.
It has been forced to lay off employees and cut costs.
It has changed its business model in an effort to become more profitable.
It is possible that Meesho will be able to turn its fortunes around and become a successful company. However, the company is facing significant challenges and it is too early to say whether it will be able to overcome them.

 

Meesho is facing a number of challenges today, including:

High cash burn: Meesho is burning through cash at a rapid pace. In 2022, the company’s losses were estimated to be around $45 million per month. This is due to a number of factors, including the company’s high marketing costs, its focus on expanding into new markets, and its investments in new technologies.

Increased competition: Meesho is facing increasing competition from other e-commerce platforms, such as Amazon, Flipkart, and Shopify. These companies have deeper pockets and more resources than Meesho, and they are able to offer lower prices and a wider range of products.

Low profitability: Meesho has yet to turn a profit. The company’s business model relies on selling products at a low margin and making up for it through volume. However, this model is not sustainable in the long term, as Meesho will need to find ways to increase its profitability in order to survive.

Reputational damage: Meesho has been criticized for its handling of customer complaints and for the quality of the products it sells. This has damaged the company’s reputation and made it more difficult to attract new customers.

Regulatory challenges: Meesho is facing regulatory challenges in India. The government is cracking down on e-commerce platforms that are engaging in unfair trade practices. This could make it more difficult for Meesho to operate in India and could impact its profitability.

Meesho is a young company and it is still facing growing pains. The company will need to address these challenges in order to become a sustainable and profitable business.