Bansal said that the firm had a PAT in “single-digit crore rupees” for July, but did not detail the specific number
“The trends (on profitability) have been secular for the last few months and we expect them to continue in the coming quarters… there is a big jump in scale expected in the quarter ended November due to the festive season, and we expect the increase in revenue to make up for our sale offers and other costs,” Bansal said.
In a statement on Monday, the Bengaluru-based firm, which is backed by SoftBank and Meta, said that it has seen its order volumes surge by about 43% and revenues shoot up 54% over the last 12 months.
“The base of the business is such that we are fairly confident that the subsequent quarters will be profitable as well,” Bansal said.
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Meesho has reduced its burn significantly from the peak of 2022, and the ecommerce startup is looking to grow from hereon while maintaining profitability. In April, ET had reported that Meesho had slashed its burn by half last year, with CEO Vidit Aatrey saying it was at around $5 million that month, and expected to shrink further in the ongoing July-September quarter.
In May, the firm fired 15% of its team in order to reduce its operating costs further, in its second round of layoffs since 2022. In a statement, Meesho said it has slashed customer acquisition costs by over 80% on a year-on-year basis while maintaining about 140 million monthly active users (MAU). Bansal said that it has about 40 million monthly transacting users (MTU).
Also in May, Aatrey told employees in a note that the firm made “judgement errors” in over-hiring ahead of the curve. “We are now faced with the hard truth of aligning our people costs with the new projections for our business,” Aatrey said in the note, in an attempt to rationalise the job cuts.
The Prosus-backed etailer, which competes against Flipkart and Amazon India, largely focuses on non-metro users selling non-branded products across fashion, accessories and more. The company had a revenue of around $400 million in FY22. Bansal said its current revenue run-rate is about $800 million.
Meesho, which does not charge seller commissions on its main marketplace except to some brands under its newly launched Meesho Mall vertical, earns about 80% of its revenues by offering logistics-related services. The rest comes from advertising.
Again, in May, a month that proved quite eventful for the company, funds managed by Fidelity Investments cut the valuation of the social commerce platform to $4.4 billion on their books, as of March 31, 2023. This was a reduction of about 10% from the $4.9 billion valuation at which the US-based multinational financial services firm had invested in Meesho, in September 2021.
Bansal said the firm’s grocery vertical was still at an “experimentation phase”, and that further expansion was dependent on the unit economics of the vertical. He added that it was currently operational only in a few cities. Last year, Meesho integrated its grocery business, Farmiso, within its core application and rebranded it as Meesho Superstore.