Meesho founder Vidit Aatrey says its ‘next round of financing could be an IPO’

E-commerce platform Meesho’s last fundraise came nearly 15 months ago in September 2021, when it raised a $570 million Series F round led by Fidelity Investments and B Capital Group. Six months prior to that, it had raised a $300 million Series E round led by SoftBank Vision Fund. 

While industry insiders say that Bengaluru-based Meesho has struggled to raise its next round amidst the funding winter, especially in late-stage deals, Co-founder and CEO Vidit Aatrey is undeterred. His claim: Meesho doesn’t need to raise a round right now.

“We are fortunate that we raised a substantial amount of money in 2021, much more than we needed. As of now, we don’t have any plans of raising money because we have more than enough in the bank, and can keep running the business in a very healthy manner for many years,” Aatrey told Business Today, exclusively. 

He also added that Meesho’s next fund-raise could potentially be through the public markets. “There is a good likelihood that our next round [of financing] would be an IPO. But the plan in 2023 is to get to profitability as quickly as possible. And once that happens, the need for external capital is very less,” Aatrey explained.

Meesho remains one of India’s most funded startups, having raised over a $1 billion in venture capital from a bevy of domestic and global investors. Between August 2019 and September 2021, its valuation zoomed from $700 million to $4.9 billion, per Tracxn.

While the initial phase of its rapid rise in India's e-commerce sector was driven by VC dollars, the company’s focus has now shifted towards profitability and meaningful growth. “Once we get to profitability, we are ready for an IPO,” Vidit says, adding, “[But] then the market needs to be ready as well.”

Meanwhile, two of Meesho’s key investors, SoftBank Vision Fund and Prosus Ventures (earlier Naspers), are confident that the e-commerce company will reach profitability “within months, not years”. 

In a separate conversation with Business Today, Sarthak Misra, Investment Director at SoftBank Vision Fund, said, “Meesho is better placed than a lot of upstarts and smaller companies given the strength of its balance sheet which gives it 2+ years of runway. It will be profitable before that. They have been able to control their costs. The organic growth of contribution margin is strong, and if we continue to see the current trends, Meesho should be profitable in 2023.”

Commending Aatrey’s “desire to go public”, Misra added, “Meesho will consider going public when the capital market is ready and at the right time to discover its value on the bourses. It is great that Vidit has this desire to go public and is getting the company IPO-ready.”

READ MORE: Meesho’s Quest for Profitability in the latest edition of Business Today magazine