Meesho, the ecommerce platform, is reportedly considering increasing the size of its upcoming funding round to $500-$650 million from $300 million earlier, given the strong interest from investors.
Out of the total amount, roughly $300 million will be designated as primary capital to settle taxes incurred during the transfer of the company’s domicile from Delaware to India, as reported by Moneycontrol. The remaining funds will constitute the secondary component.
The report quoted a source stating that discussions are ongoing, and the final round size will depend on how much each investor dilutes. However, it appears likely that the total round size will be around $500 million.
Continue Exploring: Meesho in advanced talks to raise $300 Million from Tiger Global, SoftBank, and other investors
The report mentioned that Meesho had also commenced discussions with Accel over the past few months regarding the funding round. However, negotiations between the investor and the company did not come to fruition.
It’s noteworthy that Accel was an early supporter of Flipkart, which happens to be Meesho’s main competitor.
Previous reports suggested that the ecommerce startup was in discussions to raise $300 million from Tiger Global, Peak XV Partners, SoftBank, and other investors.
Tiger Global and Peak XV are anticipated to spearhead the current round, with participation expected from SoftBank, WestBridge Capital, and Singapore-based Mars Growth Capital.
Additionally, it’s reported that Venture Highway and Meta (formerly Facebook) are among the initial investors planning to decrease their stake in Meesho as part of this round.
Nonetheless, the funding round is expected to value Meesho at $3.9 billion, reflecting a 20% decrease from its prior valuation of $4.9 billion. This adjustment comes after Fidelity’s revaluation of Meesho to $3.5 billion.
Meesho refrained from providing comments regarding inquiries on the progress of the funding round and the decline in valuation. No response was received from them up to the time of publishing this story.
It’s worth noting that in January, Fidelity adjusted the valuation of Meesho on its books, valuing the ecommerce startup at $3.5 billion. This marked a decline of 29% from Fidelity’s peak valuation of $4.9 billion for Meesho.
Established in 2015 by Vidit Aatrey and Sanjeev Barnwal, Meesho, once lauded as the epitome of social ecommerce, underwent a strategic shift in 2022, transitioning into a marketplace model.
In a recent report, brokerage Bernstein highlighted that Meesho is capturing market share and emerging as the fastest-growing ecommerce platform in India, benefiting from the robust growth observed in Tier-II and III cities within the sector.
Continue Exploring: Meesho fastest growing e-commerce player; GMV tops $5 Billion: Alliance Bernstein Report
With a budget of INR 200 crore (about $25 million), Meesho recently revealed its largest employee stock ownership plan (ESOP) buyback programme. With this programme, the company is making a major step forward, benefiting almost 1,700 current and former employees.
Continue Exploring: Meesho announces its largest ever ESOP buyback, allocating INR 200 Cr for employees