WestBridge Capital, an investment firm, is in advanced discussions to acquire a substantial stake in Meesho, an ecommerce startup, according to media reports. The deal involves negotiations with Venture Highway, a longstanding supporter of Meesho.
WestBridge Capital is reportedly considering acquiring a roughly 2 per cent stake in Meesho. This investment comes at a time when Meesho has significantly improved its financial performance, recently reporting profitability at the consolidated Profit After Tax (PAT) level as of July 2023.
As discussions unfold, current terms suggest Meesho is being valued at a discount ranging from 25 per cent to 35 per cent compared to its previous valuation, as per media reports. This move aligns with WestBridge Capital’s strategy to expand its investment in the e-commerce sector.
Meesho, backed by investors such as Meta, YC, Prosus, SoftBank, Elevation and Peak XV, had achieved a valuation of approximately USD 4.9 billion in a funding round during the latter half of 2021. It’s not uncommon for investors to divest stakes in privately held companies at discounted rates. Fidelity Investments, which co-led Meesho’s last funding round, continues to hold a favourable valuation of the company, placing it at over USD 4.5 billion according to their recent disclosures.
Venture Highway, an early backer of Meesho, initially invested USD 100,000 eight years ago, valuing the startup at about USD 1 million. Their current 3 per cent stake is worth approximately USD 150 million at the prior valuation. The firm has expressed interest in making a full exit from the startup, media reports revealed.
In the event of this deal materialising, it would be noteworthy as WestBridge typically enters startups at their Series B-D rounds, often at valuations below USD 250 million.
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