Indian social commerce player Meesho on Monday said it has turned profitable, helped by a rise in order value and a drop in expenses.
The company said it has attained profitability at a consolidated PAT (profit after tax) level, encompassing all costs (including ESOP), across all its divisions and categories.
In the last 12 months, Meesho’s order volumes soared 43%, while its revenue rose 54%, driven by growth in order volumes and monetisation rate. Meesho also reduced its tech costs by 60% in the last 12 months.
Meesho’s profitability comes amid changing investor expectations from ‘growth over profitability’ metrics to ‘profitability at all costs’, leading Indian startups to hunker down and slash expenses, lay off employees, and diversify revenue streams to fight the prolonged funding winter.
“Since we just turned from negative to positive, it’s a small nominal kind of number, single digit of course… We intend to continue the profitability trajectory,” chief financial officer Dhiresh Bansal told Reuters, without sharing specifics.
An initial public offering (IPO) is now being planned in the next 12-18 months, Bansal added.
Last week, Zomato posted a quarterly consolidated profit for the first time since its inception, as more consumers ordered food and groceries on the platform. Separately, logistics services provider Delhivery reported that its losses narrowed significantly in the quarter that ended in June.
Founded in 2015, Meesho works by building a network of “social sellers” to help suppliers distribute their products nationwide. It enables resellers to reach their customers via social media platforms such as Facebook, WhatsApp and Instagram. In its home market India, Meesho claims it hosted 140 million unique transacting users in the last 12 months.
Last year, Meesho said it was working on becoming EBITDA-positive by mid-2023 before going public. For FY 2022, its losses widened 7.5 fold to Rs 3,247 crore in FY22 against a 4.5 times surge in revenue to Rs 3,232 crore during the same period, according to Entrackr.
Earlier this month, Meesho laid off 15% of its workforce to tighten costs and sharpen focus on profitability.
In Sept 2021, Meesho company raised $570 million in a Series F funding round led by Fidelity Investments and B Capital Group. Prior to this, the company had received $300 million in a Series E funding round led by SoftBank Vision Fund.