Domestic e-commerce platform Meesho is gearing up to launch a $1 billion initial public offering (IPO), reported Moneycontrol citing sources. The report also said that Meesho has picked Morgan Stanley, Kotak Mahindra Capital and Citi as lead bankers to manage the issue. The SoftBank-backed Indian company is aiming for a valuation of approximately $10 billion, a striking 2.5 times increase from its valuation of $3.9 billion reported last year.
This strategic move is expected to culminate in a listing around Diwali, potentially positioning Meesho ahead of its major rival, Flipkart, in terms of public market entry, reported Moneycontrol. Meesho's IPO is likely to capture significant attention from investors, primarily due to its substantial valuation surge. Meesho facilitates direct sales between small businesses and consumers.
Meesho's rapid growth trajectory has drawn considerable interest from investors, who are keen to see how Meesho will leverage this capital raise for further expansion. The IPO is anticipated to create ripples in the Indian e-commerce sector, with market watchers closely monitoring its impact.
Meesho will then join a list of growing Indian startups such as PhysicsWallah (PW), Ather Energy and Lenskart seeking a valuation that is significantly higher than what they commanded during their private market fundraises, as companies chart out ambitious growth plans that will reward incoming shareholders.
Meesho's valuation jump of 2.5 times to a projected $10 billion reflects robust investor confidence in its business model and market potential. However, a couple of new-age companies including MobiKwik, Ola Electric and Brainbees Solutions (Firstcry) went public at a valuation lower than what they had initially decided or at a discount when compared to their last private market fundraise to leave some value on the table for the investors.
Despite being a late entrant in the e-commerce landscape, Meesho has grown in size and scale and improved its profit profile despite competing against well-funded rivals such as Walmart’s Flipkart and Amazon. Meesho has gained prominence over the years and grown its market share massively by focussing on Tier 3 and beyond regions or the value conscious users.