A strong anchor book indicates a robust global appetite
Meesho on Monday announced a highly successful anchor book with nearly 60 major investors, both domestic and global. CMD & CEO Vidit Aatrey said global investors, who have previously backed large value commerce companies in China, Southeast Asia and Latin America, see Meesho as a differentiated platform with strong growth visibility.
Aatrey highlighted that Meesho is already a market leader in terms of customers and order volumes, growing 53% year-on-year and growing 44% in the first half of the year, on a high base of 23 crore annual transaction users and 230 crore annual orders.
Capital light model, strong cash flows attract investors
Aatrey emphasized that Meesho’s capital-light approach has boosted investor confidence.
The company has generated ₹1,000 crore in free cash flow over the last two financial years, without owning any heavy infrastructure like warehouses, inventory or internal logistics.
“We can build at a healthy pace while keeping free cash flow positive. Investors feel our model creates long-term value without burning capital,” he said.
Improving monetization: logistics efficiency and increasing advertising revenue
CFO Dhiresh Bansal described two core revenue streams – logistics and platform advertising – that are both growing strongly.Logistics efficiency has been greatly improved: Meesho reduced logistics costs per order by 20% between FY23 and FY25, increasing contribution margins.
The company reinvested some of these profits in lower consumer prices, leading to higher user frequency and new customer acquisition.Advertising revenues – currently around a third of global peers – see a strong non-linear advantage as the seller base grows.
Bansal said both streams will remain important levers for margin expansion.
The path to profitability is led by free cash flow, not short-term EBITDA
Addressing concerns about losses, Aatrey emphasized that free cash flow is the company’s key performance measure.
“All capital allocation decisions are optimized for long-term cash flows. We have been positive on free cash flow for two years and will continue to prioritize value creation over short-term EBITDA optics,” he said.
He added that the company already has operational leverage and as volumes increase, profitability will further strengthen.
Future levers: financial services and content trading
Meesho is also testing new vertical markets with great potential:
“These are long-term revenue opportunities comparable to those of global e-commerce peers,” Aatrey said.
Growth versus profitability is not a trade-off
Bansal explained that user growth and profitability reinforce each other.
“As long as customer acquisition costs remain low and payback periods remain attractive, we will continue to invest in growth. Greater scale automatically improves fixed cost absorption and increases margins,” he said.
Acquisition strategy aimed at increasing reach
Meesho plans to allocate up to ₹1,000 crore for acquisitions in line with its mission to “democratize internet commerce”.
Areas of interest include:
- New categories
- Improvements to the logistics ecosystem
- Technological possibilities that increase the reach to smaller cities
“Opportunities that help us expand access to e-commerce across India excite us the most,” says Bansal.
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