Vision Fund leads $300m round for India's Meesho
SoftBank Vision Fund 2 has led a $300 million round for Meesho, India’s leading social e-commerce start-up, at a valuation of $2.1 billion.
Prosus Ventures, Shunwei Capital, Venture Highway, Knollwood Investment, and Facebook also participated. It brings the compnay's total funding to date to $490 million, including a $125 million round in 2019 led by South Africa’s Naspers, a significant investor in Prosus. Previous backers also include Sequoia Capital India, DST Global, RPS Ventures, SAIF Partners, and Y Combinator.
Meesho was founded in 2015 as a marketplace that helps micro and small to medium-sized enterprises (MSMEs) and individual entrepreneurs digitize their businesses. There is a strong focus on women working from home as resellers and tools for building online audiences through social media. Product categories include clothing, jewelry, homewares, cosmetics, toys, baby care, and electronics.
“We have been closely tracking Meesho for the last 18 months and have been impressed by its growth, daily engagement metrics, focus on unit economics and ability to create a strong team,” Sumer Juneja, a partner at SoftBank Investment Advisers, said in a statement. “We believe Meesho provides an efficient platform for SME suppliers and social resellers to onboard the e-commerce revolution in India and help them provide personalized experience to consumers.”
Meesho claims to have helped more than 13 million individual entrepreneurs start online businesses and reach around 50 million Indian consumers. It has delivered orders from more than 100,000 registered suppliers in 4,800 cities, the vast majority of which are tier-two cities. This activity is said to have allowed MSMEs to generate around INR5 billion ($67.2 million) in income.
In the past 12 months, the number of monthly transacting entrepreneurs on the platform has grown 10x to 5.5 million, while the number of monthly orders has grown 6x to 19.6 million. The company plans to use its latest funding to facilitate the creation of 100 million new MSMEs. It estimates India’s current population of MSMEs at around 60 million.
Meesho’s competitors in this space include Shop101, Kiko TV, GlowRoad, and DealShare. The company differentiates itself by incorporating a group buying discount scheme into its model. DealShare is also backed by DST among other global investors. However, none of these four companies has raised more than $35 million in private funding, according to AVCJ Research.
SoftBank closed its debut Vision Fund at $100 billion in 2018 and announced it had $108 billion in commitments for Vision Fund 2 as of mid-2019, including $38 billion from the parent company. Vision Fund II invests in artificial intelligence-based businesses with a stage and geography-agnostic approach. The fund’s other notable investments in India include online education unicorn Unacademy.
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