Social commerce platform Meesho, which has been in conversations for a new financing round, is all set to onboard a new investor: SoftBank. The Japan’s software giant is in late-stage talks to lead a round that can go as high as $250 million, said three people aware of the discussions.
“SoftBank has given the term sheet and if nothing goes wrong from here then the funding will be announced in a few weeks from now,” said one of the sources cited above, on condition of anonymity as the talks are private.
Sources further said that this round could raise Meesho’s valuation to over $1.5 billion — a 2.5X jump from the last time it raised money. The Bengaluru-based company was valued at $700 million during the Series D round in 2019.
“Meesho would be valued in the range of $1.5-1.8 billion,” said the second person who also did not wish to be named.
Existing investors Prosus (previously Naspers) and Elevation Capital (previously SAIF Partners) are also likely to participate in the round, said the person quoted at the beginning of the story. “The fresh round may see the partial exit of some early backers,” the person added.
Meesho has over six million resellers on its platform and 15% of them drive over two-thirds of their business. The company’s free shipping service has also helped Meesho scale faster in the post-pandemic phase.
As per sources, the company clocks around 500,000 orders daily.
Theindiabizz’s immediate queries sent to Meesho and SoftBank didn’t elicit any immediate response. We will update the story as and when they respond. Theindiabizz had reported in December that Meesho is raising a fresh round.
Sources also said that Meesho is expected to use these funds to further strengthen its offerings including a new grocery vertical: Farmiso. Meesho forayed into groceries around 10 months ago on a local community model where all the orders would be delivered to a particular reseller who will then deliver to the customers directly, explained a source familiar with Meesho’s workings.
“This could be one area where they [Meesho] might be pushing since there are 2-3 new startups including Otipy doing the same thing and showing early signs of success,” added the source.
Backed by Facebook, Sequoia, and Proses, Meesho has emerged as the category leader in the social commerce space. Meesho’s scale could also be noticed from its 3.8X surge in operating revenue which stood at around Rs 307 crore as compared to the Rs 80 crore in FY19. Its annual losses also surged 3.1X to Rs 315.4 crore in the year ending March 2020 from Rs 100.42 crore in the preceding fiscal.