Social commerce startup Meesho has achieved a funding milestone that may become its strong USP for future. No, it hasn’t become the latest entrant in the rapidly expanding galaxy of unicorns. Its latest achievement makes for far more interesting reading than mundane news of yet another Indian startup earning the unicorn crown. Meesho has become the first Indian startup to secure equity investment from social media jaguarnet Facebook.
Although Facebook and Meesho have refused to disclose financial details of the funding round, sources privy to the matter claim that the funding to be around $20-25 Mn. Speculations were already rife that Meesho was looking for fresh funding round but Facebook’s entry as a fundraiser has caught most industry observers and media fraternity by surprise. Apparently, not many people were aware that Meesho was engaged in talks with Facebook for fundraising.
Through this investment, Facebook will most probably look for ways to generate revenue from WhatsApp. Since the costly acquisition of WhatsApp in 2014, Facebook has been continuously struggling to monetize the instant messaging platform despite being globally the most dominant messaging platform. It may now be hopping to end this perennial struggle with Meesho, which knows quite a few things about monetizing social media platforms like WhatsApp.
This social commerce startup has especially become a rage among small and independent female entrepreneurs and house wives.
“Facebook is an ally for India’s economic growth and social development. We are excited about India and its rapidly rising Internet ecosystem. With this investment in Meesho, we want to fuel a business model that can result in rapid job creation and the rise of a female entrepreneurial class in India,” said Ajit Mohan, Vice-President and Managing Director, Facebook India.
So what is Meesho really all about?
Meesho is an online marketplace that bridges the gap between sellers and buyers on popular social media platforms like Facebook and WhatsApp. This Bengaluru based startup is part of the rapidly growing market that is being termed as ‘social commerce industry.’ Today most of the people benefitting from this industry are small time resellers who operate their businesses mostly from their homes.
Meesho claims that today more than 2 million resellers dealing mostly in apparels, home appliances and electronics are active on its platform. Interestingly, most of Meesho’s customers don’t hail from big metropolitan cities but from small tier 2 and tier 3 cities. These cities are usually touted as the next frontline regions in India’s quest for rapid economic development. This very fact evidently made Meesho an attractive investment proposition for Facebook.
Many experts claim that India’s next e-commerce revolution will be spearheaded by social commerce startups like Meesho. Their argument is based on unique advantages that this upcoming industry enjoys, be it personalized online shopping experience or low customer acquisition cost. These advantages don’t come into play in conventional e-commerce transactions carried out by big players like Flipkart and amazon.
Meesho counts high-profile investors like Yuri Milner’s DST Partners, RPS Ventures (a SoftBank Fund), SAIF Partners and Y Combinator.