Meesho posts maiden profit in July, weighs IPO in 12-18 months

livemint.com:

Meesho is looking at a public listing in the next 12-18 months after the e-commerce startup reported its maiden net profit in July, chief financial officer Dhiresh Bansal said. Meesho, which had earlier raised more than $1 billion from Prosus, SoftBank and Facebook, among investors, expects to close the current financial year with 40% growth in revenue run rate, Bansal said in an interview. “Our January-June revenue run rate has been around $400 million and expect to end the year at a 40% compounded annual growth rate (CAGR)," he said.

Meesho clocked a 54% rise in revenue in FY23. The company, which was last valued at $4.4 billion, posted a net profit in low single digits in July, Bansal said without elaborating. “Four out of the last six months, we have been cash flow positive.

We cannot predict a full year profitability just now," he added. This May, Fidelity, one of Meesho’s investors, cut its valuation to $4.4 billion, though the company’s last known primary valuation stands at $7 billion. The financial turnaround last month was marked by lower customer acquisition cost (CAC) and reduced marketing spends and it gives Meesho the ability to access fresh capital amid the ongoing funding winter in the broader startup ecosystem.

The company has reduced its CAC from Rs250 to Rs70, Bansal said. Though Bansal affirmed that the company isn’t looking to raise any primary capital as it already has $400 million cash reserves, two people with knowledge of the company’s plans said there could be some secondary stake sales ahead of the initial public offering (IPO). “The company needs to realign its captable (shareholding) to make space for incoming investors and, hence, some initial talks for a secondary sale have been held with