Meesho

Meesho – short for Meri Shop (My Shop) – was founded by Vidit Aatery and Sanjeev Barnwal in 2015. Vidit and Sanjeev were wing mates at the Indian Institute of Technology (IIT) Delhi hostel, with their rooms located diagonally opposite each other. Upon completion of their engineering, Vidit worked with Indian consumer goods major ITC for a couple of years, followed by a year-long stint at ad-tech startup InMobi. Sanjeev joined Sony in Japan, contributing to the camera technology for DSLRs and mobiles. ****\The duo got back in touch in May 2015 and decided to start up. For them, two things were clear.  One, it was a great time to be a tech entrepreneur in India – doing anything else would mean not living up to their potential. Two, solving a large-scale problem that affects more than 100 million people and something they can relate to. \Soon, Vidit and Sanjeev realized that most small businesses in India were still offline. They only sold within their communities and localities, which limited their earning potential. \On the consumer side, traditional e-commerce companies focused on the metros and relatively affluent consumers, leaving smaller cities and those with lower incomes out of the internet commerce revolution. Vidit and Sanjeev wanted to take the benefits of e-commerce to this cohort of consumers, democratizing internet commerce for everyone. \To that end, Vidit and Sanjeev gauged the immense potential of social networks as a sales channel early on. They created a platform that enabled millions of people, including homemakers, to become entrepreneurs and resell products in their network via WhatsAp. Meesho pioneered social commerce in India and it now has ~16 million entrepreneurs on the platform, of which over 10 million are women. \What started as an idea to digitize India’s unorganized retail is now a $4.9B e-commerce company, a single thriving ecosystem of sellers, entrepreneurs and consumers. Meesho’s evolution from pure play social commerce to e-commerce is a testament to how the company is transforming the industry and making e-commerce accessible to the masses. With a vision to enable 100 million small businesses to succeed online, Meesho is continuously facilitating MSMEs’ transition from the offline to the online world.

Put simply, Vidit and Sanjeev decided to apply to Y Combinator because they were fans of Paul Graham's iconic essays 🙂They were hungry to learn how to start up from great mentors and other entrepreneurs in Silicon Valley – the global hub of tech innovations and startups. Y Combinator’s application process made Vidit and Sanjeev think hard about what they were building, what unique insight they had that no one else did, etc. Some of these fundamental questions helped refine their thinking a great deal. While going through the batch, they learned a lot about growth and user behavior from other startups. At the same time, Y Combinator partners connected them to other entrepreneurs like Twitch co-founder Emmett Shear, who shared valuable advice with Vidit and Sanjeev on how to get insights from users to build products.

The Y Combinator community is very active, both in India as well as globally. Vidit and Sanjeev are now close friends with some of the other Y Combinator founders. They often brainstorm together on the challenges they are working on, always learning something new in the process.

When Sanjeev and Vidit got together in July 2015, they were looking at building a hyperlocal platform for fashion. During the early days, the founders did everything from taking shop inventories to cataloging them on the app to making the deliveries themselves – listening intently to feedback from users and suppliers all this while. A couple of iterations later, Meesho became a social commerce platform where resellers used WhatsApp, Facebook and Instagram to become a bridge between suppliers and consumers. Millions of resellers, most of them women, were able to supplement their household income by starting virtual stores on social channels without any investment and selling to their community. In the process, they achieved financial independence – besides a sense of accomplishment and identity. While Meesho pioneered the concept of social commerce in India, e-commerce adoption tailwinds from COVID-19 saw many consumers become more comfortable with directly shopping online. This was a huge opportunity for Meesho to tap and the company has been operating a marketplace connecting sellers and consumers (in addition to WhatsApp-led reselling) for over 1.5 years now. Direct sales on the platform now account for 80% of Meesho’s business. Funding: In July 2016, Meesho was selected by Y Combinator for a three-month summer program. In October 2017, the company raised $3.1 million in a Series A round from investors led by Elevation Capital (formerly SAIF Partners), following it up with a Series B round of $11.5 million in June 2018. Five months later, Meesho closed its Series C round of $50 million at a valuation of $200-250 million. Soon, Meta (formerly Facebook) came aboard as an investor in August 2019 and the company raised 125 million, becoming India’s first startup to be backed by the social network. In April 2021, Meesho turned a unicorn with SoftBank leading a $300 million funding round that valued the company at $2.1 billion. Later in the year, Meesho raised $570 million in its Series F round, doubling its valuation to $4.9 billion. The company has so far raised $1.06 billion from marquee investors including Prosus Ventures, Elevation Capital, Sequoia Capital, Good Capital and Symphony International. Growth and scale: 2021 and 2022 were breakout years for Meesho with the business growing exponentially and witnessing strong momentum on several fronts. Meesho became the world’s most downloaded e-commerce app globally in October 2021, as per data.ai. It repeated the feat in the first half of 2022, logging record downloads, according to Apptopia. During the calendar year 2022, the Meesho app recorded the highest Monthly Active Users worldwide, as per data.ai. In 2022, the company saw 910 million orders, with nearly 80% of them coming from small towns,  showcasing how the company’s value proposition of affordability continues to be a significant differentiator. Affordable, relatable merchandise mirroring local markets has helped Meesho make inroads into homes of first-time internet users across the country. The company’s 85 million+ active product listings and strong value prop of everyday low prices has resulted in 140 million annual transacting users. On the seller side, the company’s relentless focus on digitizing small businesses is bearing fruit. Driven by industry-first initiatives such as zero commission and by ensuring there’s no private label play or tiering of sellers, Meesho’s supplier base has grown to over 825,000. Three in five of them are new-to-e-commerce and selling on Meesho for the first time. One of the reasons Meesho is able to deliver on its promise of everyday low prices is because of its asset-light structure, wherein it works with third-party logistics players for order fulfillment. Meesho is the single-largest contributor to India’s fast-growing third-party logistics industry, accounting for ~35% of all shipments delivered by national players. Inflection points: The landmark entry of telecom operator Reliance Jio revolutionized India’s internet landscape. The availability of fast data, almost free of cost, catalyzed internet penetration, taking it to the deepest and remotest corners of the country. As other telecom companies followed suit, almost all of India became the Target Addressable Market in one fell swoop – opening the doors of opportunity for e-commerce companies. Additionally, the Covid-19 pandemic paved the way for a huge transformation in India’s retail landscape. Widespread adoption of e-commerce by millions of consumers across the country marked a record shift from offline to online. At the same time, millions of sellers discovered the potential of e-commerce platforms and embarked on their online journey.

Meesho — India’s only true online marketplace — is altering the status quo with an asset-light business model to make e-commerce inclusive and accessible for the next billion users in India.Over the last 15 years, e-commerce in India evolved with a focus on convenience-seeking customers in metros and Tier 1 cities with enough purchasing power. Much less attention was paid to residents of smaller towns and those from lower income groups with different needs around selection and affordability. Meesho is constantly working towards enabling access for this cohort of customers, reimagining the internet commerce journey for them. Over the last seven years, the company has built a simple and easy-to-use e-commerce platform that’s helped millions of new-to-ecommerce users come online. The company currently has close to ~140 million annual transacting customers. Additionally, Meesho’s vision is to enable the smallest of sellers in India to digitize their business and reap the benefits of online commerce: a much bigger market, higher incomes, a digital footprint, et al. Driven by this vision, Meesho has routinely identified and solved the challenges that potentially deter sellers from embracing e-commerce. The company launched disruptive, industry-first initiatives like zero seller commission that leave more money in the hands of suppliers and allow them to expand their business. As India’s only true e-commerce marketplace, Meesho does not differentiate between sellers on the basis of tiers, nor does it have private labels or an inventory-led play. Meesho was built on the core principle of democratization of internet commerce for the smallest of sellers across the country.

Creating a level playing field for small businesses to succeed online while catering to underserved, price-sensitive users — Meesho is on a mission to democratize internet commerce for everyone. India’s unorganized retail is estimated to account for 85% of the overall retail sector, indicating a huge opportunity for small businesses and consumers to come online. All that is required is the right platform and opportunity, a little bit of resources and some hand holding. Additionally, of the ~700M active internet users in India, only 216M transact online. There is a large chunk of people in tier 2+ cities who do not transact online. Meesho’s vision is to bring underserved users into the e-commerce fold by leveraging technology, its wide reach and strong understanding of how India shops. If Meesho truly succeeds, small businesses will be empowered to sell their wares across the country, earn more and generate employment at scale, taking India closer to its goal of a $5 trillion economy. On the other hand, consumers will be able to access affordable, relatable merchandise from all corners of the country, fulfilling their aspirations.