Meesho is in talks with Naspers for $120M funding round

Meesho is in talks with South African internet group Naspers to raise a fresh $120-130 million financing round, three people in the know said, days after Facebook invested $25 million in the social commerce startup.
The investment, if it goes through, is expected to take Meesho’s valuation to $600-650 million, almost three times more than its previous funding round, people privy to the deal details said. The investment from Facebook was likely a part of the larger capital raise.
Meesho has emerged as one of the buzziest startups in the segment, facilitating micro entrepreneurship especially among housewives and in smaller towns. 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 pro ducts.
Vidit Aatrey, CEO of Meesho, did not respond to an emailed query. A Naspers spokesperson said, “It’s our policy to neither acknowledge nor deny our involvement in any merger, acquisition or divestiture activity, nor to comment on market rumours.”
Naspers, which has emerged as one of the most fervent backers of Indian tech startups, is leading the talks to invest in Meesho. The startup has, however, engaged in discussions with others as well, said a person aware of the development.
E-commerce has been a big theme for Naspers globally, and its interest in Meesho is likely to have stemmed from wanting to lay a bet on new-age commerce. After exiting Flipkart, Naspers has invested big in ed-tech platform Byju’s and doubled down on food-delivery through Swiggy, where it now owns almost 40% stake .
While announcing its financial results last week, the internet conglomerate said it had invested $716 million in online food delivery platform Swiggy and pumped $383 million into Byju’s in the financial year ended March 31.
Investor attention in Meesho has been piqued by the fact that it is solving for small- and-medium business entrepreneurs who mostly sell unbranded wares.
These entrepreneurs struggle to shore up working capital and face limitations on selections even as they deal with lack of technology know-how and scaling issues. 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%. Some investors have also been skeptical about the category, seeing the outcome of peers like the Helion Venture Partners-backed Wooplr which recently shut down.
Meesho, founded by IIT-Delhi graduates Aatrey and Sanjeev Barnwal, competes with the likes of Mumbai-based Shop101 in India. Both companies focus on two broad segments – fashion and home, which have a larger range of differentiated stock keeping units (SKUs). Meesho and Shop101 charge a commission on service offerings to re-sellers. Meesho charges 10-20% in commissions, depending on the offering.
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.

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This article is automatically sourced by automatic news feeds through online softwares, Inventiva team has not made any modifications and adjustments in the article and is published as it is after giving due credits to its original source.

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