According to two individuals with knowledge of the matter, WestBridge Capital is currently in advanced discussions to acquire shares of Meesho in the secondary market, with a minimum value in the tens of millions. This move is part of the prominent venture firm’s strategy to expand its investment in the e-commerce sector.
WestBridge Capital, known for its two-decade focus on startups in India and Southeast Asia, is in talks with Venture Highway to purchase the latter’s stake in the social commerce startup, Meesho. These negotiations are ongoing, and the current terms imply a valuation for Meesho at a discount of 25-35% compared to its previous valuation, as per one of the sources.
Meesho has chosen not to comment on the matter, and both Venture Highway and WestBridge Capital have not responded to requests for comments.
Notably, Meesho boasts investments from major players like Meta, Y Combinator, Prosus, SoftBank, Elevation, and Peak XV and was valued at approximately $4.9 billion in its funding round during the latter half of 2021. It’s not uncommon for investors to sell their stakes in privately held companies at reduced prices. Fidelity, a co-leader of Meesho’s previous funding round, has continued to value the company at over $4.5 billion.
Venture Highway initially invested around $100,000 in Meesho eight years ago, valuing the startup at about $1 million. The firm’s 3% stake in Meesho was worth around $150 million at the previous valuation. Venture Highway has been a long-term supporter of Meesho, participating in nearly all subsequent funding rounds, and it has expressed its intention to make a complete exit from the startup.
WestBridge Capital’s interest in Meesho comes as the startup has significantly improved its financial performance in recent quarters. Meesho reported profitability at the consolidated PAT level in July and achieved a GMV of $4.5 billion in the calendar year 2022. Jefferies, in a note to its clients earlier this year, highlighted Meesho’s leading position across various fashion and lifestyle categories and its expansion into non-apparel categories, which now contribute nearly half of its GMV.
It’s worth noting that WestBridge is also an investor in DealShare, a startup initially focused on leveraging social platforms for commerce, which is currently facing some strategic challenges. If the Meesho deal goes through, it would be noteworthy because WestBridge typically invests in startups during their Series B to D rounds, usually entering at valuations below $250 million.
