You must be aware regarding the launch of e-commerce platform named Temu, which is replicating the Chinese model, in the US by giving products of decent quality at very low prices so as to attract as many customers as possible who also purchase those items as disposable ones meaning that even if it works for a few months then also their prices are worth. The same concept was launch by India’s e-commerce startup named Meesho which is backed by Japan’s conglomerate SoftBank. It is worth noting that the startup has announced that it has become profitable for the first time since its inception in 2014 which is definitely a rare achievement.
Meesho announced that it is also planning to launch the IPO in 12-18 months if everything goes right but we do know that IPO announcements generally don’t go well with startups as we have seen in the last few years. The company revealed that “its revenue between January-June was more than $400 million, and Meesho expects it to cross $800 million by the year-end,” and Meesho’s CFO Dhiresh Bansal said that “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,”
Bansal also mentioned that “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” which basically means that they need to be profitable till whenever the IPO comes to have enough interest from the investors. Meesho also revealed that it clocked 1 billion orders in the last 12 months which is no joke despite the fact that its AOV (average order value) might be much lower compared to the likes of Amazon and Flipkart.
Talking about the Indian startup and investment scene in general, we know that there is a freeze in terms of investments due to market conditions but it is also seen that a lot of startups have started to become profitable this year which bodes well for future investments in the company.
