Westbridge Capital has acquired 1.5% of Meesho at a valuation of $3.5 billion, two people with knowledge of the deal said. The investment firm acquired the stake from Meesho’s seed investor, Venture Highway.
Venture Highway will retain around 3.8% of Meesho, one of the people cited above added, requesting anonymity. In a statement, Venture Highway said it generated over 50 times its initial investment.
“Venture Highway, an early and long-term backer of Meesho, invested in the company’s first seed round over eight years ago,” the firm said in the statement.
Meesho raised capital in a primary round in September 2021, when it was valued at $4.7 billion. Since then, investors have marked down startups on their books.
However, secondary share sales—such as this one—typically happen at a discount to primary capital raise.
Venture also Highway is an investor in companies such as Moglix, Sharechat, BetterPlace, and Chalo. Its more recent investments include Cheq, Ivy Homes, Meragi and Ripik, the firm said.
In a statement explaining the rationale for its investment, Westbridge Capital said that Meesho had provided superior value to a large base of Indian consumers. “This has resulted in them making rapid strides in the fast-growing Indian e-commerce market. We are pleased to partner with the company and back the vision of the founders and management for the long runway that lies ahead,” said Sandeep Singhal, partner, Westbridge Capital.
WestBridge Capital manages over $7.5 billion of capital across investment funds focussing on India, the firm said. Meesho was founded in 2015 by Vidit Aatrey and Sanjeev Barnwal in Bengaluru as a social commerce platform. Thereafter, it transformed into a broader e-commerce marketplace. Meesho’s strategy is to diversify the product mix with a share of apparel coming down over the last couple of years, a 3 October JP Morgan report on India said. It added that the company saw strong growth in home, kitchen, and baby care products.
Half of Meesho’s traffic is organic now, which has driven down customer acquisition costs significantly, the research report said.
“It relies on third-party logistics rather than captive logistics as it believes captives are not cost-efficient even though they provide faster delivery. It enjoys better pricing from third-party logistics since it is their largest customer,” the report added.
