Google in talks to back Meesho at $4.9B valuation | Economic Times

Mumbai: Google is in talks to invest $50-$75 million in social commerce platform Meesho, multiple people in the know told ET, indicating the search giant's focus on backing promising Indian startups like Dunzo and InMobi's Glance.The investment is part of Meesho's recent financing round and values the Bengaluru-based company at $4.9 billion.In September, Meesho raised $570 million from US-based asset manager Fidelity and Eduardo Saverin’s B Capital. Google’s investment will take the round size to over $600 million.Google and Meesho did not respond to ET’s queries till press time Thursday.ET was the first to report on September 24 that Meesho was in talks to close a new funding round which would onboard Fidelity and B Capital.Google’s latest investment will take Meesho’s total financing to over $900 million so far this year, including $300 million that it raised from SoftBank Vision Fund II in April.Google has made a slew of investments in India through Google Capital and most recently from its $10 billion India Digitization Fund which it announced in July last year. Its video sharing platform YouTube acquired video social commerce startup Simsim in July.Meesho is expected to use the fresh capital to become a consumer-facing e-commerce entity that can compete effectively against dominant players Amazon India and Walmart-owned Flipkart.Founded in 2015 by Vidit Aatrey and Sanjeev Barnwal, Meesho began its journey as a reseller platform in the social commerce space, where its large base of women resellers sold products in the low-end, unbranded and long-tail ecommerce segment.After SoftBank’s capital infusion, Meesho’s intentions to compete in the big league became clear and it has since then been aggressively spending on advertisements and reaching out to consumers directly. 87194327ET reported last month that Meesho’s cash burn to acquire new users was currently at $20-$25 million per month.The social commerce startup plays in a market that has a bunch of well-funded companies like DealShare, backed by New York-based investment firm Tiger Global, which competes with it in the grocery segment, and Singapore-headquartered Sea Ltd’s e-commerce platform Shopee, which recently entered the Indian market. Shopee.in sells unbranded fashion and home goods and has a small selection of groceries and food staples.Flipkart also recently entered the social commerce space with Shopsy, which claims to have amassed over 250,000 sellers since launch a little over three months ago. Shopsy is not available for groceries as of now.Earlier this year, Meesho switched to a zero percent commission model to acquire more sellers on its platform. Ahead of the festive season, Meesho onboarded over 100,000 sellers through initiatives including free ad credits and zero return shipping charges. It presently has 250,000 sellers on its platform.Apart from operating in the long-tail unbranded category, Meesho is also investing a significant chunk of money in its online grocery delivery vertical Farmiso, for which it has been hiring aggressively.Farmiso operates on a community group buying model, driven by leaders.Other social commerce platforms like Dealshare and CityMall also sell through a similar model.“Conventional grocery models have very high logistics costs and that's why you will see all your existing logistics companies, even after many years, are only functioning in the top 4-8 cities,” Aatrey told ET in an interview last month. “When you leverage the community leaders model, you are able to serve this customer with very low-ticket sizes and offer them pricing while having a very strong unit economics base. We will continue to focus on small towns and cities and capture the entire online grocery demand,” Aatrey added.Google has in the last couple of years doubled down its investments in startups, focusing on content and commerce. It has invested $4.5 billion in Reliance Industries’ Jio Platforms, and led an investment of $145 million in InMobi’s Glance, which also owns a short-video platform, Roposo. The technology behemoth has also invested in VerSe Innovation, the parent company of Indian content and news aggregator Dailyhunt. Recently, it participated in DotPe’s Series A funding round, where it raised $27.5 million.