Meesho, a burgeoning Indian e-commerce startup, has achieved a significant milestone by reporting its maiden profit and is now setting its sights on a potential stock market debut within the next 12-18 months, according to a senior executive from the company.
In the fiercely competitive Indian e-commerce landscape, Meesho has been pitted against giants like Amazon and Walmart’s Flipkart. What sets Meesho apart is its strategic focus on catering to smaller towns and cities, offering a variety of unbranded products such as clothing and cosmetics. Notably, PitchBook data has valued Meesho at approximately $7 billion.
After grappling with losses since its inception in 2015, the e-commerce startup, which benefits from backing by Japan’s SoftBank (9984.T), announced its inaugural profit last month, marking a pivotal moment for the company.
During the period of January to June, Meesho reported revenue exceeding $400 million, and the company anticipates that figure to surpass $800 million by the year’s end, as stated by Chief Financial Officer Dhiresh Bansal during a conversation with Reuters.
Considering the transition from losses to profitability, Bansal noted that the profit margin was relatively modest, a single-digit number. He conveyed the company’s intention to continue on this path of profitability, although specifics were not disclosed.
With a firm eye on the future, the start-up is planning an initial public offering (IPO) within the coming 12-18 months. Bansal added that while the groundwork for growth, scalability, and profitability is in place, it’s imperative to establish a substantial track record for potential market investors to evaluate.
Founded by graduates of the Indian Institute of Technology, Vidit Aatrey and Sanjeev Barnwal, Meesho has exhibited impressive performance by fulfilling over 1 billion orders in the past year.
It’s noteworthy that Meesho’s achievement of its first profit arrives amid a challenging backdrop for Indian startups, which have been grappling with constrained funding opportunities due to elevated interest rates and a downturn in the global tech market. Despite these challenges, Meesho’s accomplishment aligns with a broader trend, as evidenced by Indian food delivery giant Zomato’s recent posting of its inaugural profit.
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