The company claims the latter. The filing shows that the salary allocation is part of a broader plan to invest heavily in technology infrastructure. Besides this outlay of Rs 480 crore on people, Meesho is putting Rs 1,390 crore into cloud infrastructure through its subsidiary MTPL, and Rs 1,020 crore into marketing and brand building.Together, these three segments represent the sharpest technology and growth-focused spending profile among upcoming platform IPOs, reflecting Meesho’s belief that the next phase of e-commerce growth in India will be disproportionately driven by data, automation and personalized discovery.
Still, the optics of using IPO money to pay salaries tends to be scrutinized. Investors often prefer that new capital be spent on assets, product expansion or customer acquisition, rather than personnel costs – especially for a company that has not yet achieved stable profitability.
Meesho posted rising revenues, from Rs 5,730 crore in FY23 to Rs 9,390 crore in FY25, but remains loss-making on a consolidated basis. Losses widened in the first quarter of FY26 due to one-off restructurings and ESOP costs. This has already raised questions about the visibility of profits, and salary allocation adds another layer of complexity to the debate. To understand why Meesho is choosing this route, analysts say it is important to look at the nature of its business. Meesho operates one of the largest data-heavy consumer markets in India. It processes nearly 1.8 billion annual orders, with 214 million transacting users and a merchant base of more than 575,000. The ‘everyday low prices’ model relies on algorithmic pricing, fraud detection, demand forecasting and logistics optimization at scale.
Meesho has also built a self-reinforcing flywheel where discovery, content, pricing and delivery depend on rapid machine learning systems. In that context, retaining and expanding the AI and engineering teams becomes a non-negotiable part of supporting growth.
The company says the salaries include compensation for existing team members as well as replacements and new hires, especially in the areas of ML, AI and platform engineering. For a marketplace that must operate at low margins and high frequency, even small efficiency gains in fulfillment, cloud optimization or delivery routing can significantly change the economics of the unit.
Meesho’s path to profitability is therefore closely tied to its ability to automate more of its operating stack.
There is also a global comparison worth mentioning. Major platform companies – Amazon, Alibaba, Pinduoduo and MercadoLibre – have all committed significant resources to engineering rather than physical assets during their pre-profit phase.
These companies treated technology payroll as long-term capital expenditures, arguing that it builds defensible moats that competitors cannot easily replicate. Meesho’s filing appears to be in line with this approach, especially given Meesho’s ambitions to consolidate the value e-commerce segment, which remains under-penetrated in India.
For now, the company points to improving operating metrics – rising order frequency, stronger NMV growth and positive free cash flow in FY24 and FY25 – to show the model is stabilizing. Management’s broader thesis is that India’s value-conscious customer base is expanding, e-commerce penetration in non-electronic categories remains low, and the opportunities for a dominant platform with low AOV are still wide open.
From this perspective, investing in technology talent is not an optional expense, but a structural necessity, according to the company.
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