Meesho Files for IPO, Aims to Raise $485 Million; Could Mobilise Up to $800 Million

SoftBank-backed Meesho, India’s homegrown ecommerce platform for small sellers, has revealed plans to raise $485 million through a primary issue, alongside an offer for sale of $200-300 million, potentially mobilising $700-800 million and valuing the company at $7-8 billion.

The company had filed a confidential IPO in July 2025, with details now public following Sebi approval. The listing will be promoter-driven, with co-founders Vidit Aatrey and Sanjeev Kumar holding a combined 18.5% stake. Meesho is also considering a pre-IPO placement of Rs 850 crore ($100 million), which would reduce the fresh issue size if executed.

Offer for Sale Details

The offer for sale involves 175.6 million shares, representing 4-5% stake. Key participants include early investors Y Combinator, Elevation Capital, and Peak XV Partners. Promoters Aatrey and Kumar will offload 11.8 million shares each (<0.2% stake).

Currently, Meesho’s largest shareholders are Elevation (13.6%), Prosus (12.3%), Peak XV (11.3%), and WestBridge Capital (6.1%).

Planned Use of IPO Proceeds

• Cloud infrastructure: Rs 1,390 crore for scalability and marketplace operations (FY27-FY29).

• AI & Tech Development: Rs 480 crore to enhance personalized feeds, transaction risk management, and team salaries (FY27-FY28).

• Marketing & Branding: Rs 1,020 crore for digital campaigns and influencer-led content commerce (FY27-FY28).

Financial Performance

• Net Merchandise Value (NMV) for Q1 FY26: Rs 8,680 crore (+36% YoY)

• Revenue: Rs 2,500 crore

• Restated Loss: Rs 289 crore for the quarter

• Operating Revenue CAGR (FY23-FY25): 28%

• Contribution Margin (core marketplace): Doubled from Rs 570 crore in FY23 to Rs 1,480 crore in FY25

• Net Loss FY25: Rs 3,941 crore, driven largely by India flip-related one-time costs

• Free Cash Flow: Positive for two consecutive years — Rs 200 crore (FY24), Rs 590 crore (FY25)

Meesho’s asset-light model focuses on enabling small sellers to reach mass-market consumers without owning inventory or logistics, differentiating it from Flipkart and Amazon India. Revenue comes primarily from seller services like logistics, fulfilment, and advertising, with apparel as the largest category.

Operational Highlights

• Advertising & Promotion Costs: Fell from Rs 930 crore (4.8% of NMV) in FY23 to Rs 640 crore (2.1% of NMV) in FY25

• Technology Costs: Rose just 9% despite >30% growth in transaction volume

• Workforce: Grew to 1,656 employees in FY25, with employee expenses at Rs 848 crore