Meesho Aims for $1 Billion IPO with $10 Billion Valuation

Homegrown e-commerce platform Meesho is planning to launch a $1 billion Initial Public Offering (IPO). According to a Moneycontrol report, Meesho has selected Morgan Stanley, Citi and Kotak Mahindra Capital for the management of IPO issue. The Indian company, which is supported by SoftBank, is looking for a valuation of about $10 billion, which is a startling 2.5-fold rise from the $3.9 billion it was valued at last year. 

In short:

• Meesho is planning to launch a $1 billion IPO.

• By launching the IPO, Meesho will supersede its rival, Flipkart.

• Meesho's financial performance in FY24 shows strong growth, with a 33% increase in revenue and a 97% drop in losses.

If Meesho goes ahead with its public listing as intended, it will outperform its rival Flipkart, which has been considering an IPO but awaits a decision from its parent organization - Walmart. The strategic move by Meesho is anticipated to reach a finale in a listing around Diwali season. The Meesho IPO is likely to grab significant attention from the investors majorly because of its substantial valuation surge. Meesho provides a medium for direct sales between small businesses and customers. 

Investors have taken notice of Meesho's rising growth and are quite eager to see how the e-commerce platform will use the funds for expansion of business operations. The country's e-commerce sector is anticipated to be affected by the Meesho IPO and the market observers are keeping a careful eye on its effects.

Meesho is now joining the list of rising Indian startups like PhysicsWallah, Ather Energy, and Lenskart, all aiming for valuations much higher than what they had during their private market fundraising. These companies are pushing forward with ambitious growth plans that promise significant returns for new shareholders.

Although Meesho entered the e-commerce game later than some, it has quickly scaled up and improved its profitability, all while competing with well-established giants like Flipkart (owned by Walmart) and Amazon. Meesho has gained significant traction, particularly by focusing on Tier 3 and smaller regions, catering to value-conscious users.

Meesho’s Financial Performance in FY 24 

Meesho reported strong results in FY24’s financial performance. Its operating revenue jumped 33% and reached Rs. 7,615 crore, up from Rs. 5,735 crore in the previous year. Moreover, the company reduced its adjusted losses by a remarkable 97%, shrinking from Rs. 1,569 crore to just Rs. 53 crore. By the end of 2024, the e-commerce business saw a 35% year-on-year increase in orders with approx. 175 million annual transacting users.

It is interesting to note that nearly half of Meesho's user base comes from tier 4 towns and smaller cities. This showcases the company's growing presence in India’s rural and semi-urban areas.

Author: Dushyant Sharma

Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.