WestBridge Capital is reportedly in advanced discussions to acquire shares of Meesho, a social commerce startup, in the secondary market. The investment firm, known for its focus on startups in India and Southeast Asia, is engaging with various Meesho investors, including Venture Highway, to potentially buy out their stake in the company. While the terms of the deal are still being negotiated, the current valuation of Meesho reflects a discount of more than 20 to 25% compared to its previous valuation. Meesho has attracted investments from prominent backers such as Meta, YC, Prosus, Elevation, and Peak XV, and was valued at approximately $4.9 billion in its most recent funding round.
Meesho’s improving financial performance in recent quarters has sparked WestBridge Capital’s interest in the company. Meesho reported profitability at the consolidated level in July and achieved a Gross Merchandise Value (GMV) of $4.5 billion in 2022. The startup has gained a leading position in multiple fashion and lifestyle categories by offering competitively priced and diverse products. WestBridge has previously invested in DealShare, another startup that initially utilized social platforms for commerce. However, DealShare is currently facing challenges regarding its business model. If the deal with Meesho goes through, it would be notable for WestBridge, as the firm typically enters at lower valuations during Series B-D funding rounds, usually below $250 million.
Despite the potential acquisition, both Meesho and WestBridge Capital have declined to comment on the matter. It is not uncommon for investors to purchase shares of privately held firms at discounted prices, and Fidelity, a co-leading investor in Meesho’s previous funding round, still values the company at over $4.5 billion. Venture Highway, an original backer of Meesho, first invested eight years ago when it valued the startup at $1 million, and has been a long-term supporter ever since.