WestBridge Capital, a prominent venture firm with a focus on startups in India and Southeast Asia, is reportedly in advanced stages of negotiations to purchase shares of Meesho in the secondary market. This move showcases WestBridge’s desire to diversify its investments in the e-commerce sector.
Key Takeaway
WestBridge Capital is in advanced talks to acquire shares of Meesho in the secondary market. This move highlights the venture firm’s interest in expanding its investments in the e-commerce sector. Meesho, known for its profitable operations and diverse product offerings, has attracted several high-profile investors. If the deal materializes, it would signify WestBridge’s willingness to invest in startups at a later stage, deviating from its usual investment strategy.
The Deal and Stakeholders Involved
WestBridge Capital is currently engaging with multiple Meesho investors, including Venture Highway, to potentially buy out their stake in the social commerce startup. The discussions are ongoing, and the current terms value Meesho at a discounted rate of around 20 to 25% compared to its previous valuation.
Meesho, which boasts investors such as Meta, YC, Prosus, Elevation, and Peak XV, was valued at approximately $4.9 billion in its most recent funding round held in the second half of 2021. Nevertheless, it is not uncommon for investors to sell their stakes in privately-held companies at discounted prices. Fidelity, a co-lead investor in Meesho’s previous round, continues to value the startup at over $4.5 billion according to its latest disclosures.
Venture Highway has been one of Meesho’s long-term backers, supporting the startup since its early days and participating in almost all subsequent funding rounds.
Meesho’s Financial Improvement
WestBridge’s interest in Meesho comes at a time when the startup has significantly improved its financial performance. Last month, Meesho announced that it had achieved profitability at the consolidated PAT level in July. The startup has carved out a niche in the market by offering competitively priced, diverse, and unbranded products. In 2022, Meesho reported a Gross Merchandise Value (GMV) of $4.5 billion.
Jefferies, in a note to clients earlier this year, praised Meesho’s leading position in multiple fashion and lifestyle categories. The note highlighted how Meesho evolved from primarily focusing on apparel to becoming a truly horizontal pure-play marketplace, with almost half of its GMV now coming from non-apparel categories.
About WestBridge Capital
WestBridge Capital is an investor that typically enters startups at Series B-D funding rounds, often at valuations below $250 million. The firm is also known for its investment in DealShare, a startup that initially leveraged social platforms for commerce and is currently facing challenges in its business.
