The investment—the first such by SoftBank in India’s booming social commerce space—was made by the conglomerate’s second Vision Fund targeted at technology companies.
This is the fourth deal for Vision Fund 2 in India. The fund, which has received close to $15 billion from SoftBank, earlier invested in sales enablement platform MindTickle ($100 million), edtech firm Unacademy ($150 million) and Lenskart Solutions ($231 million).
Six-year-old Meesho, founded by IIT-Delhi batchmates Vidit Aatrey and Sanjeev Barnwal, connects producers with resellers, who eventually market the products to consumers through social media platforms such as WhatsApp and Facebook.
It offers services such as payments and logistics to these resellers, which enables ease of transactions. Meesho currently has more than 45 million customers.
“We will use the capital in three ways—team building and strengthening our senior leadership; invest a lot in creating awareness of the business even in smaller towns; and fund new initiatives like our new grocery vertical ‘Farmiso’. We will focus on growth over the next couple of years and maybe then consider an IPO," said Vidit Aatrey, founder and chief executive of Meesho.
Existing investors Prosus Ventures, Facebook Inc., Shunwei Capital, Venture Highway and Knollwood Investment also participated in the latest investment round. With the funding from SoftBank, Meesho has raised about $490 million so far.
The pandemic has led to a spurt in business for Meesho, with small firms as well as entrepreneurs seeking to move their businesses online. Aatrey said the aim is to enable 100 million small businesses on the platform.
Bain & Co. and Sequoia Capital India forecast last December that social commerce, which is currently valued at $1.5-2 billion, will be worth as much as $20 billion in five years, touching nearly $70 billion by 2030.
SoftBank’s Vision Fund 2 plans to explore investments in sectors such as healthtech, fintech, business-to-business and software-as-a-service.
Sumer Juneja, partner at SoftBank Investment Advisers said, “We have been closely tracking Meesho for the past 18 months and have been impressed by its growth, daily engagement metrics, focus on unit economics and ability to create a strong team. We believe Meesho provides an efficient platform for SME suppliers and social resellers to onboard the e-commerce revolution in India and help them provide a personalized experience to consumers."
SoftBank is the largest foreign investor in India’s internet economy. While SoftBank Group has invested around $3.59 billion in India since 2010, the Vision Fund has pumped in nearly $8.01 billion since 2017.
“Globally, SoftBank has always been excited to back founders that provide unique solutions for the local market. By using the power of artificial intelligence and machine learning, Meesho has created a platform for many small business owners to sell to the next cohort of internet users," said Munish Varma, managing partner at SoftBank Investment Advisers.