Meesho's Early Investors Eye Secondary Deals at $3-3.5 Billion Valuation

By siliconindia  |  Tuesday, 02 January 2024, 15:58 IST

Meesho's Early Investors Eye Secondary Deals at $3-3.5 Billion Valuation
Angel investors and initial institutional shareholders of the e-commerce entity Meesho are reportedly engaged in talks with investors to sell their stakes, as per sources familiar with the matter. Discussions are ongoing for a deal at a valuation ranging between $3 billion to $3.5 billion, although these figures might be subject to change, according to the sources. Notably, entities like WestBridge Capital and Norwest Venture Partners have purportedly initiated conversations with Meesho's early investors, indicating a rising trend in secondary share sales within mature firms. New investors are demonstrating interest in assets that have navigated funding challenges and reduced operational expenses in the preceding year.
Early investor Venture Highway previously sold a portion of its stake in Meesho to WestBridge Capital in October, maintaining a 1% share in the SoftBank and Meta-backed startup, which held a valuation close to $5 billion in 2021. According to sources, WestBridge Capital has indicated interest in acquiring additional shares in Meesho, while Norwest has also participated in discussions. These talks mainly focus on determining the deal's pricing, as older investors aim to exit their positions. Notably, secondary transactions typically occur at a discounted rate compared to the last primary valuation, which might affect the timing of the company's next primary capital raise. A Meesho spokesperson declined to comment on the matter, citing company policy. Queries sent to Norwest Venture Partners and WestBridge Capital remained unanswered.
Although identities of other interested investors weren't immediately available, reports suggest that Venture Highway intends to divest its remaining 1% stake in Meesho during this round. Meesho recently reported a 48% decrease in its fiscal year-end loss to Rs 1,675 crore, accompanied by a 77% growth in operating revenue to Rs 5,735 crore. In the first half of FY24, the online marketplace recorded a 37% year-on-year surge in operating revenue to Rs 3,521 crore, with a significant 90% reduction in losses to Rs 141 crore. While the company confirmed achieving profitability in the September quarter, specific figures weren't disclosed. Meesho's CEO, Vidit Aatrey, previously mentioned the company's first after-tax profit in July.

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