Naspers has announced that it’s led an investment round in Indian marketplace Meesho, to the tune of $125 million. Facebook and former Vodafone Group CEO Sir Arun Sarin also joined the round, along with existing investors SAIF, Sequoia, Shunwei Capital, RPS and Venture Highway.
Meesho essentially encourages its users to start a business from home with no investments. It calls itself a social commerce online marketplace and, according to the Naspers statement, it “enables independent resellers to build small businesses by connecting them with suppliers to curate a catalogue of goods and services to sell.”
Sellers use social networks like Facebook, Instagram and WhatsApp to sell their goods and services. Meesho provides logistics support and payment tools.
Founded in 2015, the marketplace supports 2 million entrepreneurs across 700 Indian towns. It hopes to hit 20 million sellers by 2020. The site’s catalogue is mainly made up of clothes, home, wellness and electronic goods and it’s created a new distribution channel for around 15,000 traditional suppliers. It sees around 1 million monthly visitors, according to SimilarWeb.
It’s unclear whether Meesho is already making money but in 2016, co-founder and CEO Vidit Aatrey told TechCrunch it intends to take a commission on sales “when the time is right.” Aatrey also said the marketplace is basically “Shopify for mobile” and that it “adds commerce features to WhatsApp,” turning WhatsApp’s 100 million Indian users into potential customers. The whole thing is slightly reminiscent of multi-level marketing, but users don’t have to sign up new sellers.
According to Aatrey, more than 90% of Indians still shy away from online shopping. “They want online shopping that enables them to buy from small businesses they trust. Meesho provides a way for these customers to get what they need — and we believe it is the future of online shopping for the next 500 million consumers.”
Meesho plans to use the capital injection to expand to more locations, improve its technology, add more products, and develop its analytics capabilities.
This investment is in line with the Naspers strategy of focusing on India. The company led a $540 million investment in Indian education technology company BYJU’S and a $1 billion Series H investment round in food delivery company Swiggy in December.
“We were attracted to Meesho because the team have built a uniquely Indian solution that utilizes the reach and scale the internet enables, and harnesses and makes it available for small sellers to better serve customers no matter where they live, for the benefit of all,” head of India investments for Naspers Ventures Ashutosh Sharma said.
This is an interesting investment for Facebook, who may be looking to replicate Tencent’s WeChat mini-program success in China on WhatsApp. These mini-programs are built on the WeChat social network infrastructure and offer classifieds and marketplaces new opportunities in reaching audiences and creating new business models. They currently have 600 million weekly active users (75% of all internet users in China), with this figure expected to rise to 900 million by 2020.