Meesho in talks for pre-IPO placement ahead of listing next month
The company is talking to several global sovereign wealth funds, a source said, adding that the size of the company's IPO will change once the pre-IPO placement goes through.
Mumbai: Social e-commerce platform Meesho is in early talks with domestic and foreign institutional investors for a pre-IPO placement as it prepares for a public listing next month, three people familiar with the matter said.
"The company is looking to raise anywhere between $50-70 million as part of the pre-IPO placement," one of these people said, adding that the size of the company's IPO would change once the pre-IPO placement went through. "The company is talking to several global sovereign wealth funds who are keen to come in pre-IPO," this person added.
“Meesho is in active discussions with institutional investors as there is a lot of demand for the asset," said a second person, adding that the conversations would progress based on price discovery over the next 7-10 days. Meesho decline to comment.
The company is set to join a number of new-age startups including Groww, Lenskart, Pine Labs and PhysicsWallah that have gone public this quarter, marking one of the busiest periods in the capital markets this year.
Bloomberg News reported on Friday, citing people familiar with the matter, that the company was in talks with SBI Funds Management Ltd. for a pre-IPO placement, seeking a valuation of $6 billion.
IPO details
Meesho, which filed updated draft IPO papers on 18 October after a confidential filing earlier this year, is expected to raise ₹4,250 crore in fresh capital, and sell 175.6 million existing shares under an offer for sale (OFS). Shareholders who will sell shares include Elevation Capital, Peak XV Partners, Y Combinator, Vidit Aatrey, Sanjeev Kumar, Man Hay Tam and VH Capital. It has appointed Kotak Mahindra Capital, Axis Capital, Morgan Stanley India, JPMorgan and Citigroup to help with the issue.
Meesho, which switched its base from the US to India in May, was among the firms that received approval for its IPO from Sebi last month.
The company said it would use the proceeds for cloud infrastructure in its subsidiary Meesho Technologies Pvt. Ltd, to pay salaries to its existing and replacement hires for the machine learning and AI and technology teams, for branding and marketing, and to fund acquisitions.
Founded in 2015 by Vidit Aatrey and Sanjeev Barnwal, Meesho’s operating revenue jumped 25% to ₹9,390 crore in FY25, while net loss widened to ₹3,941 crore from ₹327.6 crore in FY24. Its platform offers small businesses and individual entrepreneurs access to millions of customers, pan-India logistics, payment services, and customer-support capabilities.
Meesho, which focuses on online shoppers in tier-2 and tier-3 towns and beyond, has raised more than $1.3 billion in private funding in total, and is backed by prominent investors including Softbank, WestBridge Capital and Fidelity Investments. The company was last valued around $4 billion in 2023.
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