Meesho is on course to become a unicorn startup, with SoftBank tantalizingly close to lead a massive funding round in the social commerce startup. The round, as per the grapevines, is estimated to be around $200 – 250 Mn and will mark SoftBank’s debut in India’s nascent yet promising social commerce sector.
The round will also mark an auspicious moment for Meesho as it will become the first startup from social commerce space to breach the $1Bn dollar valuation mark. Additionally, after Digit Insurance, Meesho will probably become the second startup in 2021 to achieve unicorn status.
reports claim that the talks with SoftBank have reached the last stage and the deal is most certainly likely to be announced in the coming weeks. SoftBank will be the new high-profile international investor in the Bengaluru-based company, the other being Facebook. Facebook had invested in Meesho in 2019.
Couple of existing investors like Elevation Capital (formally known as Saif Partners), Sequoia Capital and Shunwei Capital are also expected to join the funding round.
The upcoming funding round is coming at a time when the competition in India’s social commerce space is heating up.
Who are Meesho’s competitors?
- Shop 101
- Kiko Tv
Meesho’s FY 20 performance – Key statistics
- Operating revenue: 307 CR – surges by nearly 3.7X as compared to FY19
- Expenses: 657 Cr – surges by nearly 260% as compared to FY19. The company has spent nearly 185 Cr in Fy19.
Social commerce sector: an opportunity waiting to be exploited
It is widely believed that social commerce will unleash the next wave of the e-commerce revolution. Although it is a niche part of the burgeoning e-commerce sector, this niche market is craving its own identity. The rapid internet penetration, cheap data and growing spirit of entrepreneurship among women are likely to be conducive factors for the niche market in the long run.
The below chart shows the estimated growth trajectory of India’s social commerce sector
The above chart clearly shows low penetration of online shopping in India and subsequently hints towards critical challenges posing India’s social commerce sector.