Tiger Global, Softbank to end India's funding winter with $300 million round in Meesho: Report

US-based Tiger Global and Peak XV Partners are set to end India's funding winter with a reported $300 million round in the e-commerce unicorn Meesho.

The round is notable not only for its size but also as Tiger Global's first major investment in India since the departure of Scott Shleifer, its head of private equity, in November. Peak XV Partners, a previous investor in Meesho since 2018, along with Tiger Global, will contribute $150 million to this round, Moneycontrol reported. 

At what valuation?

The report said the current round values Meesho at $3.9 billion, a 20% decrease from its previous valuation of $4.9 billion in 2021. The adjustment follows a valuation cut by Fidelity to $3 billion earlier in the year.

Alongside Tiger Global and Peak XV, SoftBank, an existing investor, will contribute $30 million, with additional funds coming from new investors including Singapore’s Mars Growth Capital and UK’s Think Ventures, totaling the remaining $150 million.

Shifting base from the US to India 

A significant portion of the raised capital is earmarked for tax-related expenses as Meesho prepares to relocate its base back to India from Delaware.

The strategic move is in anticipation of a planned Initial Public Offering (IPO), mirroring a trend seen with other tech giants like PhonePe. The funding round will consist mainly of primary capital, with a minor portion allocated for secondary sales to allow early investors an exit.

How well Meesho is performing financially?

Meesho has reported a notable reduction in its losses from Rs 3,251 crore in FY22 to Rs 1,675 crore in FY23, alongside a revenue increase of 77% from Rs 3,232 crore to Rs 5,735 crore. The startup has also reported profitability in recent months.