Meesho Lines Up Its Revenue Pieces Ahead Of IPO

If you thought ecommerce in India today is all about quick commerce, think again. Away from the buzz around 10-minute deliveries, Meesho is showing that a new marketplace model can flourish and even get ready for an IPO before Flipkart, the OG ecommerce marketplace to come from India.

Meesho flirted with quick commerce in the early days through its Super Store and other experiments, but it quickly realised that the best way to attract the next 100 Mn shoppers from India’s Tier 2, 3 and 4 cities will only be possible with a marketplace approach and an open seller model.

So while there have been questions about Meesho’s changing business model over the years — from social commerce to affiliate commerce — its current avatar has proven to be robust.

The Softbank-backed company, which has raised more than $1.6 Bn in debt and equity funding over the years, is likely to become the first horizontal ecommerce marketplace to go public from the Indian startup ecosystem. As such this is a massive deal for the ecosystem as well as for Meesho.

Meesho’s Profit Card

The Bengaluru-based unicorn filed its DRHP with SEBI via the confidential route last week, and is expected to raise up to $1 Bn through the public offering.

Meanwhile, its closest rival, Flipkart is also preparing for a mega IPO, but Meesho is likely to outpace Flipkart to the public listing. Indeed, Flipkart’s recent focus has turned to quick commerce and fintech even as it dangles the prospect of an IPO.

If anything Meesho has other advantages over Flipkart too. Not least of which is profitability. For context, Meesho’s FY24 adjusted loss (exclusive ESOP costs) dropped to INR 53 Cr from INR 1,569 Cr in FY23 and revenue grew by 33% to INR 7,615 Cr.

Overall, the company reported a loss of INR 305 Cr for the year, compared to Amazon’s loss of INR 3,469 Cr against revenue of INR 25,406 Cr. Flipkart’s marketplace revenue stood at INR 17,907 Cr and losses were at INR 2,358 Cr in FY24.

While Amazon and Flipkart operate from a larger revenue base, Meesho’s strength lies in its bottomline, something that will matter a lot to retail investors later when the time for the IPO comes.

Plus, Meesho topped the charts for the most downloaded commerce apps in India in 2025, as per Sensor Tower data. The company claimed to have 187 Mn unique annual transacting users at the end of December 2024 with over 1.3 Bn total orders placed.

So Meesho’s scale is growing rapidly even as it closes in on profits. And this will be vital going forward.

Playing The Volume Game

While resting its premise on value over velocity, Meesho’s gross merchandise value or GMV hit $6.5 Bn in FY25, according to a CLSA report. In volume terms, Meesho commanded 37% of the ecommerce market, a significant chunk considering the scale of Amazon India and Flipkart.

The low average order value (AOV) of INR 315–INR 350 could be a concern but that’s the primary proposition that Meesho is working on. In the battle between Meesho and Amazon-Flipkart, it’s a game of value vs convenience. Meesho’s rising market share has come at the cost of Flipkart and Amazon.

CLSA expects Meesho to expand its share of India’s ecommerce market from the current 8.5% to 10% over the next six years, riding on strong traction in Tier 2 and 3 cities, an asset light logistics model and a sharp focus on affordability.

By focusing on value rather than chasing convenience or rapid user growth, Meesho proved that it can extract profits in the marketplace model.

The Branded Evolution

A key part of the marketplace transition has been Meesho’s focus on D2C brands. It launched a separate category called Meesho Mall for branded products with low commissions charged from these brands. This is Meesho’s bet that its customers will eventually gravitate towards larger brands.

It is a step towards potentially increasing repeat purchases and user stickiness, according to Meesho insiders.

Meesho Mall started out with beauty and personal care products and has since onboarded over 1000 brands onto the platform across categories. This is akin to Amazon or Flipkart’s main platform but the number of SKUs is lower.

While Meesho’s bet big was on new-to-internet users in the early days, branded products are the next big focus for Vidit Aatrey and Co because its user base has matured and D2C brands are also catering to affordable segments.

While Meesho doesn’t charge commissions from the sellers in unbranded categories, it charges commissions from D2C brands for Meesho Mall. This offers a better revenue balance for the company as compared to Amazon or Flipkart and could be the key to profitability.

On the brand front, Meesho’s commissions are lower than rivals Amazon, Flipkart, according to sources, but this is hard to verify given the secrecy around commissions.

Brands that list on Meesho Mall are required to customize SKUs in terms of size, quantity, and pricing, based on Meesho’s internal data and user purchasing behaviour. This is what Meesho gains at the expense of some commissions. And it could pay off in the long run when it comes to user stickiness.

“The Meesho Mall strategy is not just about onboarding brands — it’s about re-engineering their products for our audience,” said a second source.

IPO bound Meesho is expected to announce more brand tie-ups in the run up to its public listing, but it’s not clear how much revenue this vertical is bringing.

“There are leverages that brands, particularly D2C ones can build on a platform like Meesho with 3.7 Mn orders placed every day. The D2C brands which are often cash-strapped can reach out to the underpenetrated semi urban, rural markets and use Meesho’s in-house logistics for fulfilments,” a D2C startup founder claimed.

Valmo’s Role In Meesho’s IPO Run

Valmo, Meesho’s in-house logistics is a critical piece in Meesho’s IPO story.

Flipkart or Amazon rely heavily on company-owned warehouses and third-party logistics players, but Valmo operates on an asset-light model. Meesho doesn’t invest in warehouses; instead, it has built a tech platform to onboard hyperlocal logistics partners and connect them directly to sellers. This is skin to Shiprocket’s aggregator model.

This approach reduces fixed costs and allows Meesho to scale rapidly without the need for capital investments. “There are tech and manpower costs, of course, but no warehousing expenses or long-haul logistics overheads,” said a logistics industry insider tracking Meesho’s Valmo vertical.

Meesho’s earlier partnerships with third-party logistics players did not solve delays in delivery, compliance and tracking, missing orders or frauds.

Valmo’s tech-first model is built to solve this, according to those we spoke to. It is essentially another marketplace that Meesho runs for sellers and logistic players. Since launch, Valmo has serviced 15,000 postal codes, and has 6,000 logistics partners, the company claims.

Valmo claims it is unique in the sense that it is a platform in which stakeholders across each part of the delivery chain can bid depending on their capacity, leading to optimisation of latent capacity and lower costs. This is the tech stack that Meesho has built that allows it to operate the asset-light model without too much burn.

Meesho’s Moat

Of course, Flipkart and Amazon are taking notes. Flipkart has invested more than $500 Mn in its Meesho alternative Shopsy, whereas Amazon is pushing Amazon Bazaar heavily within its main app. The idea is to price-conscious shoppers and target value.

It’s a page straight out of Meesho’s playbook, but Meesho has a headstart and has the right network for unbranded products. It’s not going to be easy to replicate this.

Flipkart and Amazon have their hands full with quick commerce as well, but they do have more resources at their disposal. Their ecosystems still lean toward brands, structured cataloguing, and high logistics costs, making it difficult for them to compete in the INR 99 economy.

There’s also the fact that Flipkart and Amazon continue to serve a significant volume of premium customers. Veering from this core audience could dilute the platform experience.

Meesho also has to contend with quick commerce players like Blinkit, Instamart and Zepto that are also eyeing value along with convenience through bulk orders and a wider selection of local, unbranded home products. However their utility beyond metros remains untested even now after years of investment.

For IPO investors, Meesho’s ability to maintain its Tier 2+ stronghold while fending off competitors will be a critical proof point. The company is projected to list at a $10 Bn valuation.

But price cannot be a moat for long. As Meesho’s revenue mix evolves, one could see brand commissions become more central to its profits. It wouldn’t be the first platform to change its revenue focus in search of profitable growth.

If that happens, Meesho will have to rethink its current moat.

Markets Watch: IPO Momentum, New Listings & More

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• Zomato’s New Chief: Foodtech major Eternal has appointed Aditya Mangla as the CEO of its food ordering and delivery business, replacing Rakesh Ranjan who completed his two-year term as the chief executive
• WeWork India’s IPO Back On Track: More than three months after SEBI kept the coworking startup’s DRHP in abeyance over certain disclosures, the regulator has reinstated WeWork India’s IPO bid. SEBI is currently processing the coworking major’s draft IPO papers
• Square Yards To File DRHP: The Delhi NCR-based proptech startup plans to file its draft IPO papers for a potential INR 2,000 Cr listing by the end of the ongoing fiscal. Square Yards is currently finalising investment bankers for its IPO

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