WestBridge Capital to pick up secondary stake in Meesho at around $3 billion

India-focussed investment fund WestBridge Capital, which backs both private and public market companies, is likely to pick up a small stake in online commerce marketplace Meesho in a secondary transaction, valuing the company at around $3 billion, sources aware of the matter said.

Venture Highway, one of the early investors in Meesho, is selling its stake to WestBridge Capital in the secondary share sale, people in the know added. “The round is almost through and is being priced at around $3 billion, WestBridge is picking up about 2% stake in Meesho,” a person in the know said.

WestBridge has been actively funding technology companies over the past few years having backed companies like Freshworks, ecommerce firm Dealshare, edtech company PhysicsWallah and Lead.

SoftBank-backed Meesho was last valued at nearly $5 billion in 2021 following its $570 million funding led by US-based Fidelity and B Capital. Typically, secondary transactions take place at a discount to the last primary valuation.

For Venture Highway, which first invested in the firm in 2015, this would be a significant exit having backed the startup early on.

On August 7, Meesho had said it turned profitable for the first time on a consolidated profit after tax (PAT) level. It did not disclose the specifics of its profit numbers but company founder and chief executive Vidit Aatrey had said they were on track to record similar profits in the coming months and quarters.

Emails sent to Meesho, WestBridge Capital and Venture Highway did not elicit an immediate response on Friday evening.Techcrunch first reported on the fundraise by Meesho.

For Meesho, which competes with bigger rivals like Walmart-owned Flipkart and Amazon India, the upcoming festive season would be critical in order to clock a higher rate of growth compared to the first six months so far. ET had reported in April that the firm is trying to reduce its burn in order to save its capital and has readjusted growth expectations accordingly. It is said to be on an annualised revenue run-rate of around $750 million.

The funding round comes at a time when big-ticket funding deals continue to be rare but late-stage startups are seeing secondary deals between investors. Vertical ecommerce firms like FirstCry and Lenskart are among firms that have recently closed secondary deals onboarding new investors.

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