Full access at just Rs 3/day

Journalism of Courage
Advertisement
Premium

Meesho IPO: SPAC listing in US or public offering in India on the cards

The company is also looking to build a compliance framework by the end of this month, for its public offering planned in the first half of 2023, according to sources

Softbank, Meesho, Meesho IPO, Initial Public Offering, Social commerce marketplace Meesho, Business news, Indian express business news, Indian express, Indian express news, Current AffairsThe Meesho app as seen on Android device. (Image credit: Shruti Dhapola)

Social commerce marketplace Meesho is looking to finalise a location and build a compliance framework by the end of this month, for its public offering planned in the first half of 2023, according to people with knowledge of the matter. The Facebook and Softbank-backed company is contemplating choosing from either a public listing in India or a SPAC-listing in the US.

🗞️ Subscribe Now: Get Express Premium to access the best Election reporting and analysis 🗞️

The company is learnt to be currently working on defining key performance indicators and business metrics for its investors, and building compliance adherence on its app and website. According to people with knowledge of the matter, Meesho is aiming to be “IPO-ready” by the end of 2022. “To stick to the timeline, the company needs to make sure that its governance, financial reporting, and internal processes are in place to meet regulatory requirements by the end of the year,” one of the persons said.

“The company is still contemplating a Special Purpose Acquisition Company (SPAC) listing in the US, or a traditional listing in India,” another person said. “Currently, it is carrying an internal discussion on the differences between the two types of listings, which will eventually determine where it lists”.

Subscriber Only Stories
Premium
Premium
Premium
Premium

Several companies use the SPAC route to go public in the US. SPACs are publicly listed investment vehicles that have no operations and are formed with the intention of merging with a private company. India’s most valuable startup, edtech firm Byju’s is also reportedly considering a SPAC listing in the US.

“Meesho also hired former JP Morgan executive Dhiresh Bansal as its chief financial officer to guide the company through the listing process,” one of the people said.

At the moment it isn’t clear whether Meesho’s public listing would be an initial public offering or an offer for sale (OFS) which would be for the sole purpose of giving its investors a complete or partial exit from the company, or a combination of both.

Advertisement

In response to a detailed questionnaire, a Meesho spokesperson said that the “commentary here is inundated with factually incorrect information”. However, the company did not elaborate on its statement or the claimed inaccuracies, despite multiple requests.

Sources also said Meesho is currently not profitable but “has zero debt”. “The company has lots of funding still left in the bank to continue the zero per cent commission it charges from sellers on its platform,” a company source said.

The company had last raised $570 million led by Fidelity Management and Eduardo Saverin’s B Capital Group, valuing it at around $5  billion in September last year. At the time, the company had said it was eyeing to reach 100 million monthly transacting users by December 2022. Google is also looking to invest $50-$75 million in the social commerce startup.

Advertisement

Meesho started out as a reseller led platform where it helped these resellers not only source their products, but also provide logistics and tech support. But, in the last one-and-a-half years, the share of Meesho’s consumers — most from tier 2 and tier 3 towns — buying directly from the company has been increasing.

Notably, Meesho is currently staring at an intensifying competitive scenario with homegrown players such as Flipkart, and foreign companies like Shopee having entered the social commerce space in the last one year.

Also, over the last year, India witnessed a series of new economy tech IPOs, which saw success in terms of subscription of the offering but have lately seen a sharp correction. These include Zomato, PB Fintech (Policybazaar), One97 Communications (Paytm), etc.

First published on: 06-03-2022 at 03:53:06 am
Next Story

On Ukraine, speak up India

Home
ePaper
Next Story
close
X