Indian social commerce player Meesho, which recently hit headlines for turning profitable, is understood to be in talks with private equity firm WestBridge Capital to raise capital.
This could be a secondary deal worth at least tens of millions wherein WestBridge could buy out Venture Highway’s stake in the social commerce startup at a discount, TechCrunch reported.
While Venture Highway first invested $100,000 in Meesho about eight years ago, the startup also counts the likes of Meta, YC, Prosus, SoftBank, Elevation and Peak XV among its existing backers. Venture Highway has invested in the company in multiple rounds and is currently said to be looking at a full exit.
While negotiations are ongoing, Meesho could raise the capital at a discount of 25-35% over its previous valuation of about $4.9 billion in its last round in 2021, the report further added.
In August 2023, Meesho said that it had attained profitability at a consolidated PAT (profit after tax) level, encompassing all costs (including ESOP), across all its divisions and categories and that its order volumes had soared 43% in the last 12 months.
Meesho’s profitability came amidst changing investor expectations from ‘growth over profitability’ metrics to ‘profitability at all costs’, leading a host of Indian startups to hunker down and slash expenses, lay off employees, and diversify revenue streams to fight the prolonged funding winter.
Valuation corrections have happened across sectors with the worst affected being new-age businesses riding on the e-commerce wave.
The startup, established in 2015, is now understood to be looking at an IPO over the next 12-18 months.
In September 2021, Meesho 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.