After becoming the first Indian startup to attract investment from Facebook, Meesho is likely to add another high-profile investor in its boardroom. According to sources, Bengaluru based startup is in talks with Japanese tech giant SoftBank to raise $150-200 million. Existing investors are also likely to participate in the fundraising exercise but the talks are reportedly still in very early stage.
Meesho and SoftBank have so far refused to comment on the fundraising report. However, if there is indeed any truth in this report then this only reaffirms Meesho’s emergence as a market leader in the social commerce space. Traditionally, SoftBank has mostly invested in those startups that are already either market leaders or likely to emerge as market leaders in their respective sectors.
Meesho evidently has marched ahead of all its competitors on several important metrics. It has close to 2 million active resellers on its platform and has so far raised nearly $100 Mn. The undisclosed amount of investment secured from Facebook in June sealed Meesho’s reputation as a poster boy of the industry, with other competitors now busy playing the catch up game.
The other prominent competitors in this industry are Bengaluru based GlowRoad and Mumbai headquartered Shop101.
But what is social commerce companies all about?
New age social commerce companies are widely expected to play an anchor role in bringing the next wave of e-commerce revolution in the country. Unlike Flipkart and Amazon that focus on branded products, Social commerce companies like Meesho are targeting unbranded products by bringing small re-sellers on their platform.
Meesho and all its competitors are essentially online market place that connects manufacturers with small re-sellers, who eventually sell these products on various social media platforms such as WhatsApp and Facebook.
Another interesting aspect is that most of Meesho and its competitor’s customers don’t hail from big metropolitan cities but from tier 2 and tier 3 cities. What seems to be working for Social commerce companies in these hinterland regions are favorable factors like absence of big players like Flipkart & Amazon and people’s strong affiliation for unbranded products.