Meesho has fired 300 employees and is seeking to remove as many extra positions as it tries to streamline its operations following an ongoing war to get new funding at favorable phases.
The latest: The Bengaluru-established startup is at crossroads presently as the terms it has received from investors for the new round of funding range between $4.5 billion to $4.9 billion, demanding anonymity as the affair is private.
Meesho has tied up with investors Qatar Investment Authority and GIC for the brand-new investment
Why it matters: Meesho reached $4.9 billion valuation in Sept and is spending $40 million every month to add new clients and scale its business. Highly unlikely to sustain this cost without raising new capital.
The startup has shut Superstore operations in more than 90% of the cities it operated in, which led to many employees losing their job. Meesho registered a loss of Rs. 498.6 Cr In FY21.
Roadblocks: The startup said it was streamlining its grocery business to enhance efficiencies. “As we look to boost efficiencies in the light of the integration, a small number of full-time roles and certain third-party positions on six-month contracts at Meesho Superstore were reassessed to remove redundancies with the core business,”
Change in strategy, high cash burn, no profit in sight, and intensified competition from big players—Flipkart and Amazon—Meesho, which is in the market to raise funds, is struggling to answer tough questions from investors.
Sandwiched: Asia’s popular e-commerce platform Shopee launched in India last year chocked as Shopee scales up in India, Meesho is now sandwiched between Flipkart and Amazon on one side and Shopee squeezing its business from the other side
Catch Up Quick: With Meesho burning close to $40 million each month, per estimates, low revenue led to the sacking of employees. Investors who have a ringside view of Meesho’s operations and financials raised similar thoughts expressing concerns.
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