On September 29, ET had reported that WestBridge Capital was looking to purchase about a 2% stake in Meesho at a $3 billion valuation, in a secondary transaction. Venture Highway held about 3% in Meesho prior to the stake sale, according to a person in the know.
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Venture Highway did not comment on the size of the stake it was selling, or how much money it made through the transaction. It however said the sale resulted in an over-50-times return on investment into Meesho from its first “vintage” fund.
“Having firmly believed in Meesho’s culture and founding principles, it has been a pleasure to be part of its journey since inception. We have closely witnessed how the company disrupted and transformed India’s online e-commerce landscape with its unparalleled vision. We continue to remain excited for the company’s success, especially, on its mission to democratise internet commerce for everyone,” said Neeraj Arora, founding partner at Venture Highway.
Venture Highway first invested in Meesho in 2015. The exit comes just days after Venture Highway co-founder Samir Sood stepped down as a partner of the firm. At the same time, it had appointed Priya Mohan as the managing partner.
On the other hand, WestBridge has actively funded technology companies like listed SaaS player Freshworks, ecommerce firm Dealshare, edtech PhysicsWallah and Lead among others.
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SoftBank-backed Meesho was last valued at nearly $5 billion in 2021, following its $570 million funding led by US-based Fidelity and B Capital. Typically, secondary transactions take place at a discount to the previous primary valuation.On August 7, Meesho said it posted a profit on a consolidated basis after tax for July, without disclosing specific numbers. ET had reported in April that Meesho was trying to reduce its cash burn in order to save capital and had readjusted growth expectations accordingly. It is said to be on an annualised revenue run-rate of around $750 million.
The secondary sales comes at a time when big-ticket, growth-stage deals continue to be rare in the startup sector. However, late-stage startups are seeing secondary transactions between investors. FirstCry and Lenskart are among companies that recently closed secondary sale of shares, onboarding new investors.