Meesho’s goal is to achieve profitability in the 24 fiscal year and hopes to increase revenue

Meesho aims to achieve profitability and increase revenue in the 24 fiscal year

Business Dialogue learned that, according to a senior official of Meesho, the company’s goal is to achieve profitability in the 24th fiscal year, as it hopes to increase revenue and optimize costs. With the support of SoftBank, the company also plans to achieve more than 100 billion rupees in revenue before the 25th fiscal year. Although the possibility of an IPO in the 24th fiscal year is being considered, it will only happen if the company is profitable.

These comments are significant after one of Meesho’s investors, Fidelity Investments, lowered the company’s valuation by 10% to $4.4 billion.

“Our expectation is to achieve profitability in the current fiscal year, that is, the 24th fiscal year. In the 23rd fiscal year, our revenue grew by 50%, and we reduced our losses by two-thirds through cost optimization measures. Cash consumption also decreased by 90%,” said Meesho’s CFO Dhiresh Bansal.

Bansal mentioned that it is difficult to share specific numbers as the audit for the current fiscal year has not ended yet. However, the revenue run rate for the fourth quarter of the 23rd fiscal year is $800 million annually.

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Regarding the relationship between profitability and IPO, Bansal said, “The motivation for the IPO is not just going public. We want to create returns for our investors. One of the obvious rules we have set is to achieve profitability before coming close to going public.”

“We expect to achieve profitability in this fiscal year, and then we will consider going public based on market conditions.”

He clarified that at least in the second half of the year, the referred profitability is net level, not EBITDA. In the 22nd fiscal year, Meesho recorded a loss of about 32.51 billion rupees and revenue of nearly 32.32 billion rupees.

Bansal is confident that with cost optimization strategies and growth forecasts, the company’s revenue will exceed 100 billion rupees by the 25th fiscal year. Since 2021, the Gross Merchandise Volume (GMV) has grown 20 times to reach $4.6 billion.

Regarding the 10% valuation adjustment, Bansal clarified that the actual adjustment was 6%, while the remaining 4% was related to Esops adjustments. According to him, the company’s growth roadmap has not been affected by the valuation adjustment. He said that due to the global funding winter and high interest rates, the decrease in valuation has become a norm in the market.

Regarding the government’s ONDC (Open Network for Digital Commerce), a Meesho official stated that the company has an integration agreement and believes that this will promote industry growth. The company is currently testing its integration with the network in a test mode.

BusinessDialogue learned that Meesho has 1.1 million sellers, a large portion of whom are female entrepreneurs. Meesho is also the only e-commerce platform that does not charge commission on sales made on its platform. Bansal confirmed that they will continue to use this model but will charge for value-added services to support small entrepreneurs during their tenure.

Editor: Estella/AMZ123

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