On Friday, the e-commerce platform Meesho announced that its losses for the financial year ending on March 31, 2023, decreased by 48%, amounting to INR 1,675 crore. Simultaneously, the operating revenue for the same period witnessed a substantial growth of 77%, reaching INR 5,735 crore.
The Bengaluru-based online marketplace, with a substantial portion of its sales stemming from non-metro markets, declared an operating revenue of INR 3,232 crore in FY22. However, it faced a loss of INR 3,247 crore during the same fiscal year. It’s crucial to note that the financials for FY23 pertain to Meesho’s Indian entity, named Fashnear Technologies, while its parent company, Meesho Inc., is domiciled in the United States.
The latest financials are pending submission to the Registrar of Companies (RoC).
For the first half of FY24 ending on September 30, 2023, Meesho stated that its operating revenue increased by 37% year-on-year, reaching INR 3,521 crore, alongside a noteworthy 90% reduction in losses to INR 141 crore. The company, however, mentioned attaining profitability for the September quarter without disclosing specific figures.
In August, Vidit Aatrey, the CEO of Meesho, had first announced that the company had achieved its first post-tax profit for the month of July.
Before that, in May, Meesho terminated 15% of its workforce, amounting to 251 employees. The company had indicated at the time that this measure was implemented to establish a ‘leaner organizational structure to attain sustained profitability’.
The firm backed by SoftBank and Peak XV Partners stated in a release that it managed to enhance its revenue in FY23, attributed to advancements in transaction frequency and monetization through diverse value-added services to sellers.
The primary source of revenue for Meesho comes from providing logistics services to sellers and advertisements. Additionally, the company has initiated the practice of levying fees from specific brands within Meesho Mall.
The company attributed the decrease in losses to an ‘enhanced focus’ on factors such as customer acquisition costs and expenditures related to servers and infrastructure, among other considerations.
The company asserts that it maintained positive cash flow throughout the first half of FY24.
“While the business continued to demonstrate sustainable growth, Meesho also became the first horizontal ecommerce company to turn profitable in India since July 2023 and has continued to remain so,” it added in the statement.
On October 13, reports indicated that Venture Highway, one of the earliest investors in Meesho, divested a portion of its shares in the e-commerce startup to the India-focused investment fund WestBridge Capital. The size of the stake sale and the proceeds from the transaction were not disclosed by Venture Highway.
In September 2021, Meesho secured $570 million in its latest funding round, valuing the company at $4.9 billion. The round was spearheaded by Fidelity and B Capital Group. To date, Meesho has garnered a total of over $1 billion in funding from notable investors, including Prosus Ventures, SoftBank, B Capital, and Peak XV Partners.
Established in 2015 by Aatrey and Sanjeev Barnwal, Meesho is in competition with e-commerce giants such as Flipkart and Amazon India. Notably, Meesho does not levy commissions on sellers.
The company has undergone several strategic shifts from its initial business model, which heavily depended on individual resellers in small towns and villages. These resellers would purchase products in bulk from the company and sell them within their local communities and broader social circles.
