Facebook backs social commerce startup Meesho in first India investment
As Facebook explores ways to generate revenue from WhatsApp, the company is now turning to a startup that already has a lead. The social juggernaut said today it has invested in social-commerce startup Meesho in what is the first time the firm takes equity in an Indian startup.
Neither Facebook nor Meesho, which prior to this announcement had raised about $65 million from a number of investors including DST Partners, RPS Ventures and Shunwei Capital, shared financial terms of the deal. A source familiar with the matter told TechCrunch that the capital was “very significant.”
Meesho, a Y Combinator alumnus, is an online marketplace that connects sellers with customers on social media platforms such as WhatsApp. The four-year-old startup claims to have a network of more than 2 million resellers who largely deal with apparels, home appliances, and electronics items.
These resellers are mostly homemakers, most of whom have purchased a smartphone for the first time in recent years. 80% of Meesho’s user base is female, startup’s co-founder and CEO Vidit Aatrey told TechCrunch.
Meesho also has most of its customers in smaller cities and towns, popularly dubbed as India 2, where most users are still not online. These are two things that attracted Facebook to Meesho, Ajit Mohan, VP and Managing Director of Facebook India, told TechCrunch in an interview.
“A platform that is aimed at India 2 and has such a large user base of women — when most people online in India are predominantly men — is a remarkable achievement,” he said. According to several estimates, males account for more than 70% of India’s internet users.
Meesho claims that it is helping thousands of resellers earn more than Rs 25,000 ($360) each month. In an interview with TechCrunch last year, Aatrey said the startup, which operates in India currently, planned to enter international markets in the coming future.
Even as WhatsApp is a crucial play for Meesho, the startup will continue to engage with other social media platforms, Facebook’s Mohan said. Last year, Facebook launched its Marketplace in India which operates in the same space as Meesho. Mohan said the company does not see Meesho as a vehicle to expand its own family of services.
On the contrary, Facebook is now open to exploring investment in other startups that are building unique solutions for the Indian market. “Wherever we believe there is opportunity beyond the work we do today, we are open to exploring further investment deals,” he said. There is no particular category that Facebook is necessarily looking at, however.
Even as Facebook has not made any push to make WhatsApp expand beyond a communications service, users in India, the service’s largest market with more than 250 million users, are increasingly finding ways to incorporate Facebook-owned app into their businesses.
Google, Amazon, and Twitter, too, have made investments in Indian startups. While Twitter has backed social platform ShareChat, Google has invested in hyperlocal concierge app Dunzo. And to be sure, Facebook also acquired an Indian startup five years ago.
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