E-commerce startup Meesho achieves first profit, plans IPO in 12-18 months

Meesho, a prominent Indian e-commerce startup, has marked a significant milestone by announcing its inaugural profit and outlining plans for a potential stock market debut within the next 12-18 months, according to a senior company official.

In a competitive landscape dominated by giants like Amazon and Walmart's Flipkart, Meesho has garnered attention by catering to smaller towns and cities with its range of unbranded products, encompassing clothing and cosmetics. The company's strategy has resonated, leading to popularity and a valuation of nearly $7 billion, as per PitchBook data.

Following years of losses since its inception in 2015, Meesho, backed by Japan's SoftBank, revealed that it achieved profitability for the first time in the past month, as stated in an official release.

Meesho aims to cross $800 million in revenue by the year-end

For the first half of the year (January-June), Meesho's revenue surpassed $400 million, with Chief Financial Officer Dhiresh Bansal expressing confidence that it will exceed $800 million by year-end. 

"Since we just turned from negative to positive, it's a small nominal kind of number, single digit of course... We intend to continue the profitability trajectory," he said without sharing specifics.

Highlighting the company's future plans, Bansal stated that an initial public offering (IPO) is now on the horizon within the next 12-18 months. 

"We feel that the growth, scale and profitability are there (for an IPO), but you also want to make sure that there is enough of a track record for market investors to look at."

1 billion orders in 2022

Meesho, co-founded by Indian Institute of Technology graduates Vidit Aatrey and Sanjeev Barnwal, has managed to secure over 1 billion orders over the past year.

This remarkable profitability achievement by Meesho arrives during a period when many Indian startups have encountered challenges in raising funds, grappling with the impact of higher interest rates and a global downturn in the tech market. Numerous startups in India have resorted to substantial cost-cutting measures and layoffs.

Recently, another major player in the Indian startup landscape, Zomato, the renowned food delivery giant, also announced its inaugural profit, adding to the positive shift being witnessed in the sector.

(With Reuters inputs)