Meesho valued at $2.1 billion with SoftBank led $300 million funding

BENGALURU: SoftBank’s Vision Fund 2 has led a $300 million

funding

in Facebook-backed

social commerce

startup

Meesho

. With this, Meesho’s valuation has tripled to $2.1 billion, making it the latest unicorn (startups valued at $1 billion or more) this year. Prior to this, four startups officially attained the unicorn status this year. At least a couple of more are lined up to join the coveted club in the coming weeks. Meesho’s existing investors -- Prosus Ventures, Facebook, Chinese fund Shunwei Capital, Venture Highway and Knollwood Investment -- have also participated in the current funding round.


SoftBank’s bet on Meesho, which was started by Vidit Aatrey and Sanjeev Barnwal in 2015, is an indication that social commerce will be the next growth driver for e-commerce in India -- beyond the 100 million users on e-commerce platforms like Amazon and Flipkart. Meesho, according to Aatrey, has seen more than a 10 times growth in its monthly transacting users, at 5.5 million, compared to March 2020.

SoftBank has now invested $8 billion in India’s digital economy through its Vision Fund 1 & 2, including the $2.5 billion it put in Flipkart and which it later sold for $4 billion to

Walmart

when the US retailer acquired Flipkart in 2018. In all,

SoftBank Group

has invested more than $11 billion in India, according to industry estimates.

“We have grown very fast in the last one year and have more aggressive goals for the next few years as well. Our eventual aim is to enable 100 million small businesses to come online and become successful,” said Aatrey. “We started with women entrepreneurs in the fashion and accessories space and are now getting deeper across the country. We also got into grocery. The focus is to put this money to expand in more categories,” he added.

Meesho also plans to invest part of the new capital to strengthen its technology infrastructure and team, and on marketing to expand further in the country. Social commerce can occur through various models -- video (live or pre-recorded), chats through messaging apps, social networking platforms, reseller networks, and group buying. Meesho largely relies on the reseller network and has around 13 million individual entrepreneurs on its platform reaching over 45 million customers.

“By using the power of artificial intelligence and machine learning, Meesho has created a platform for many small business owners to sell to the next cohort of internet users. We look forward to being a part of this journey,” said Munish Varma, managing partner at SoftBank Investment Advisers.

A recent report by Bain & Co and venture capital firm Sequoia Capital said social commerce could be $16-20 billion in size in the next five years compared to around $2 billion in 2020.