Social media giant Facebook has decided to back the startup Meesho, its first investment in India. The platform picked up a minority stake in the social-commerce firm.
The investment is estimated to be worth $25 million (Rs 172 crore). But this isn’t the first time Meesho has procured massive funds.
The Bengaluru-based startup has already raised around $65 million through Venture Capital firms such as Bain Capital and Sequoia Capital, among other investors.
Meesho operates on a system where it connects sellers and customers via social media platforms such as WhatsApp. It claims to have over 2 million sellers in its database, who mainly sell items like home and kitchen products, travel packages and fashion wear, among others.
Founded in 2005, a major chunk of the startup’s network consists of women. The firm is targeting India 2, which comprises the smaller cities and towns.
Facebook’s VP and Managing Director of Facebook India told TechCrunch: “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.”
The investment is significant to the working of Meesho. The firm’s most dominant platform for carrying out operations is WhatsApp, which is owned by Facebook. The deal greatly strengthens its hold on the messaging app.
Facebook itself is looking for ways to generate revenue from its widely used messaging app and could use its backing a platform which has cracked the monetisation to further its own attempt.
The investment comes when Facebook is looking to increase its role in the E-commerce sector of India. It has already launched its own marketplace, similar to Meesho, in 2018.
WhatsApp has also begun its own investment in Indian startups. It conducted a ‘startup challenge‘ where it received entries from approximately 1700 startups.
These were then evaluated on various aspects. 10 entries were shortlisted for the opportunity to pitch their ideas to a mix of venture capital firms and entrepreneurs. Finally, five winners were chosen.
The total prize money of $250,000 (Rs 1.7 crore) was divided equally among all the winners, which consisted mostly of digital-based startups.
Facebook has identified India as its biggest user base with around 250 million users, and is, looking to expand and become more than a just social media platform in the nation.
Even WhatsApp, which it acquired in 2014, has its biggest user base in India with more than 200 million users.
(Featured image source: Wikimedia Commons)