Meesho says on track to achieve EBITDA breakeven this year

BENGALURU: E-commerce marketplace Meesho is on track to achieve EBITDA breakeven this year and has logged 120 million average monthly active users in 2022. Backed by Marquee investors, including Fidelity, Softbank, Prosus, Meta, B Capital, Sequoia Capital and Elevation, the company has raised about $1.1 billion in funding to date and has a cash buffer of about $400 million.

Jefferies in a note said the two key revenue streams for Meesho are fulfilment charges and ad income.

“Against the take-rates charged by competition who have a convenience-first model, Meesho’s fulfilment charges are lower. This allows it to offer much lower prices to customers vs the same product for competition,” it said.

While Meesho is much smaller in size (GMV terms) versus Flipkart Group and Amazon India, its average monthly active users count is 55 per cent of the incumbents, the report said. Over the last two years, Meesho added about 100m MAUs, much higher than additions by peers.

In CY22, Meesho clocked about $670 million in revenues, which implies a 15 per cent take-rate, the bulk of which was from fulfilment charges. In order to drive costs lower, Meesho follows an asset-light model and outsources the delivery to third-party players such as Delhivery, Ecomm Express and Shadowfax, among others. Meesho, which is the third largest e-commerce retailer with a CY22 GMV of about $4.5 billion and a 7 per cent market share, is growing much faster than the overall e-commerce market, said Jefferies.

The company primarily focussed on apparel but diversified into other lifestyle categories over time as it evolved into a truly horizontal marketplace. As of 4QCY22, about 50 per cent of Meesho’s GMV was from non-apparel categories as against just a 30 per cent share in 4QCY20.

Meesho is not currently focussing on mobile and electronics categories that contribute about 45 per cent to the e-commerce industry GMV. Dhiresh Bansal, Chief Financial Officer at Meesho, said, “Over the last few quarters, we have seen rising traction with users across the country flocking to the platform. With economies of scale kicking in and our strong focus on profitable growth, we are very close to becoming EBITDA positive.”

Growth trajectory

• Meesho logged  120 m average monthly active users in CY 22
• Monthly transacting user count rose 26X over CY 20-22
• Fastest E-commerce platform to onboard 1 million sellers
• Ad income currently stands at 6 per cent of revenues
• As of Q4CY22, about 50 per cent of Meesho's GMV was from non-apparel categories

BENGALURU: E-commerce marketplace Meesho is on track to achieve EBITDA breakeven this year and has logged 120 million average monthly active users in 2022. Backed by Marquee investors, including Fidelity, Softbank, Prosus, Meta, B Capital, Sequoia Capital and Elevation, the company has raised about $1.1 billion in funding to date and has a cash buffer of about $400 million. Jefferies in a note said the two key revenue streams for Meesho are fulfilment charges and ad income. “Against the take-rates charged by competition who have a convenience-first model, Meesho’s fulfilment charges are lower. This allows it to offer much lower prices to customers vs the same product for competition,” it said.googletag.cmd.push(function() {googletag.display('div-gpt-ad-8052921-2'); }); While Meesho is much smaller in size (GMV terms) versus Flipkart Group and Amazon India, its average monthly active users count is 55 per cent of the incumbents, the report said. Over the last two years, Meesho added about 100m MAUs, much higher than additions by peers. In CY22, Meesho clocked about $670 million in revenues, which implies a 15 per cent take-rate, the bulk of which was from fulfilment charges. In order to drive costs lower, Meesho follows an asset-light model and outsources the delivery to third-party players such as Delhivery, Ecomm Express and Shadowfax, among others. Meesho, which is the third largest e-commerce retailer with a CY22 GMV of about $4.5 billion and a 7 per cent market share, is growing much faster than the overall e-commerce market, said Jefferies. The company primarily focussed on apparel but diversified into other lifestyle categories over time as it evolved into a truly horizontal marketplace. As of 4QCY22, about 50 per cent of Meesho’s GMV was from non-apparel categories as against just a 30 per cent share in 4QCY20. Meesho is not currently focussing on mobile and electronics categories that contribute about 45 per cent to the e-commerce industry GMV. Dhiresh Bansal, Chief Financial Officer at Meesho, said, “Over the last few quarters, we have seen rising traction with users across the country flocking to the platform. With economies of scale kicking in and our strong focus on profitable growth, we are very close to becoming EBITDA positive.” Growth trajectory Meesho logged  120 m average monthly active users in CY 22 Monthly transacting user count rose 26X over CY 20-22 Fastest E-commerce platform to onboard 1 million sellers Ad income currently stands at 6 per cent of revenues As of Q4CY22, about 50 per cent of Meesho's GMV was from non-apparel categories