WestBridge To Invest In Meesho At $3.5 Bn Valuation: Report

WestBridge Capital, an investment firm with a history of supporting startups in India and Southeast Asia, is reportedly in advanced discussions to acquire a significant stake in the e-commerce startup Meesho, according to media reports.

The deal involves negotiations with Venture Highway, a long-time supporter of Meesho. WestBridge Capital is considering purchasing around a 2 per cent stake in Meesho. This investment coincides with Meesho's recent financial performance improvement, including profitability at the consolidated Profit After Tax (PAT) level as of July 2023.

Reports suggest that the current terms of the deal value Meesho at a discount ranging from 25 per cent to 35 per cent compared to its previous valuation. This aligns with WestBridge Capital's strategy to expand its investments in the e-commerce sector.

Meesho, backed by investors like Meta, YC, Prosus, SoftBank, Elevation, and Peak XV, achieved a valuation of approximately USD 4.9 billion in a funding round in the latter part of 2021. It's common for investors to divest stakes in privately held companies at discounted rates. Fidelity Investments, a co-leader in Meesho's last funding round, continues to hold a favorable valuation of the company, estimating it at over USD 4.5 billion according to their recent disclosures.

Venture Highway, an early supporter of Meesho, initially invested USD 100,000 eight years ago when the startup was valued at about USD 1 million. Their current 3 per cent stake is worth approximately USD 150 million at the previous valuation. The firm has expressed interest in fully exiting its investment in the startup, as revealed by media reports.

If this deal comes to fruition, it would be significant, as WestBridge typically enters startups at their Series B-D rounds, often at valuations below USD 250 million.