In a sector that faces frequent disruptions, Meesho has managed to stay relevant by investing in technology and new businesses, the company’s senior executives told Mint in an interview. And structural pivots over the past six years have made it ready for an initial public offering (IPO), they said.
The company has been growing at a steady pace and has been cash-flow positive over the past few years, according to co-founder and chief executive officer Vidit Aatrey.
“I believe there are many, many benefits of going public. Not just in being able to attract the right talent, but creating value for the stakeholders we have been associated with like consumers, sellers, merchants and logistics partners,” he said. “We believe it’s the right thing to do for the company to basically build now in public, and we also feel that we are now in the right stage to go public.”
The ten-year-old online marketplace, founded by Aatrey and Sanjeev Barnwal, is backed by investors including Elevation Capital, Peak XV, Y Combinator, Softbank, B Capital and Fidelity, among others. The retailer largely focuses on sellers and buyers in smaller cities.
In 2021, Meesho made its first pivot to a full-fledged e-commerce business model, while continuing to focus on affordable goods for mass customers outside of major cities. That has helped it hold its ground even as rivals Flipkart and Amazon expanded aggressively outside of urban centres. In April last year, Amazon launched the Bazaar vertical for sellers to list non-branded apparel and other products for below ₹600 apiece, squarely targeting Meesho’s core value proposition. This month, Amazon spun Bazaar out as a separate app across several developing markets.
Meesho is also facing the rapid growth of quick commerce in non-grocery items, including home goods and apparel, and these companies are scaling up in smaller cities where Meesho thrives.
Bernstein estimates quick commerce to be a $350 billion market by FY30, growing at an annualized rate of about 18%. Besides groceries, packaged food, meat and dairy, its definition of quick-commerce categories includes personal care, home care and apparel. And, the research firm is optimistic about Meesho.
Value retailers like Meesho will continue to succeed by focusing on high volumes and low prices, catering to the 420 million customers of “Emerging India” who make up 30% of India’s consumer base and account for 41% of total household spending, analysts at Bernstein wrote in a report earlier this month.
Betting on tech
Aatrey is betting on the company’s investment in technology to future-proof it against disruptions. “Technology continues to evolve. And we are a technology company, so we have always stayed ahead of most people in terms of investing very, very aggressively behind technology,” he said.
Meesho has built a logistics platform Valmo, where all kinds and sizes of logistics companies can come online and serve the merchants. “It was not possible earlier, and we have seen that innovation is helped by the ecosystem a lot. Recently, we also kind of launched a content commerce platform providing opportunities for influencers to monetize their audience. And we have seen that scale very well. We are doing a lot of work as part of our edge to bets.”
Valmo has reduced Meesho’s dependence on third-party logistics service providers. Unlike Firstcry’s ExpressBees, an independent company that provides logistics services to other clients, Meesho is not looking to externalize Valmo.
“I think it will continue to be captive. It’s a core part of our value proposition, and we will keep it within the ecosystem,” Aatrey said. “All the benefits accrue to the ecosystem. So, we have no plans to externalize it ever.”
The company’s focus on technology won’t change, he said.
“We have continued to evolve, invest, and we will continue doing it even after going public,” said Aatrey. “Actually, nothing changes for us. Being public or private doesn’t change that. If you are not investing a lot in technology, you’ll stay behind.”
Eyeing $5.8 billion valuation
On Friday, Meesho announced its price band for the upcoming IPO at ₹105-111 per share, valuing it at the upper end at $5.8 billion, a 15% mark-up to its peak valuation of $5 billion it fetched in 2021.
“The objective function for us as part of the IPO was to get the base of long-term aligned shareholders… to have the highest quality investors, which we believe we will be able to attract with this issue,” said Dhiresh Bansal, chief financial officer, Meesho.
However, Meesho’s offer is yet another instance of new-age companies pricing the IPOs conservatively to leave enough on the table for the incoming investors. The company scaled down the size of the share sale by existing investors in the offer-for-sale (OFS) component by almost 50%.
“All of the shareholders that were selling, or most of them which hold large stakes, wanted to sell the bare minimum that was needed for us to meet the regulatory threshold of 10%,” said Bansal, adding that they remain committed to the long-term vision of the company. The capital markets regulator mandates companies going public to sell a minimum of 10% stake.
Meesho seeks to raise ₹4,250 crore via fresh share sale, while public shareholders will be selling 10.55 crore equity shares via an offer-for-sale. A large part of the fresh capital will be allocated towards hiring, strengthening the tech stack, and inorganic growth activities, Bansal said.
Shareholders selling part of their stake in the IPO are Elevation Capital, Peak XV Partners, Golden Summit, Y Combinator, and the promoters. The promoters own 18.5% of Meesho, while other shareholders hold 81.50% the stake. The company’s largest shareholders include Elevation Capital (15.11% stake), Prosus’ Naspers Ventures (12.34%), and Peak XV Partners (11.3%), followed by Softbank-owned SVF II Meerkat (9.3%) and WestBridge Crossover Fund (3.92%).
The company reduced its losses to ₹700.7 crore for the six months ended September 2025 from ₹2,512.9 crore a year earlier. Revenue rose 29.40% to ₹5,577.5 crore during the period. Its operating revenue rose 23% year-on-year to ₹9,389.9 crore in the financial year ended March.
Big Tech threat
Meesho’s other main source of revenue is advertising services on the platform. However, Big Tech firms are rapidly making inroads into the online shopping experience. For instance, OpenAI’s ChatGPT debuted a new ‘Shopping Research’ feature this week, allowing users to ask the app to recommend products tailored to their needs and personality, drawing on current and past information the user may have shared with the platform.
Google, too, introduced AI tools allowing users to shop conversationally through its search business. These offerings from deep-pocketed Big Tech rivals may threaten the very traffic of shoppers headed to dedicated e-commerce platforms such as Meesho.
Homegrown rivals are also building tools to combat the rise of AI-led shopping activity. For instance, Flipkart-owned Myntra debuted an AI shopping assistant on the platform in 2023 using Azure OpenAI, a tool offered jointly by Microsoft and OpenAI.
“LLMs and with generative AI, there is a way to reimagine that shopping experience,” said Sanjeev Barnwal, co-founder and chief technology officer of Meesho. “We are already investing in that. A large part of our chats and a decent part of our voice calls [in customer support] are already automated by AI. We are trying to reimagine the shopping experience using generative AI and make it extremely simple for consumers.”
Meesho’s core customers prefer to use simple, intuitive apps, such as WhatsApp, which are universal to the smartphone experience in India, Barnwal said. And, he added, shopping searches from AI platforms still account for only a fraction of total online shopping traffic in India.
Creator Bet
Meesho is monetising creators on the platform, offering a chance to smaller influencers and local sellers to make money and drive sales.
“We now have more than 50,000 creators who are actually making income while selling products for our sellers,” Barnwal said. “Influencers having a lot of followers and views and not being able to monetise that following has been a big problem for a while.”
In the last 12 months, Meesho has generated more than ₹1,200 crore of net order value from the influencers on its platform, Aatrey said.
Despite the demise of content-led commerce firms like The Good Glamm Group, creators are heavily influencing online shopping. About 2.5 million creators in India are responsible for $300-400 billion of consumer spending in the country, a number that is expected to cross $1 trillion by 2030, according to a May report by Boston Consulting Group. However, only 8-10% of these creators are actually able to monetise their following, although fashion and beauty—Meesho’s mainstay—are the most promising among these categories.
