Meesho's Game Changer, Unveils First-Ever Quarterly Profit in Q2 FY24 – Figures Under Wraps
Meesho Secures Historic Profit in Q2 FY24, Keeps Numbers Confidential
1 January 2024
Meesho, backed by Softbank, achieves historic milestone as the first e-commerce unicorn in India to report a consolidated profit after tax in Q2 FY24.
The startup demonstrates a remarkable financial turnaround with a 90% reduction in losses (Rs 141 crore) and a 37% YoY increase in revenue (Rs 3,521 crore) during H1 FY24.
Meesho attributes its financial success to factors such as increased app downloads, higher transaction frequency, diversified category mix, and strategic focus on monetization through value-added seller services.
Meesho, a Softbank-backed e-commerce unicorn, has achieved a significant milestone by becoming the first in its sector to post a consolidated profit after tax. While the exact profit figure for the second quarter of the financial year 2024 (Q2 FY24) wasn't disclosed, the accomplishment underscores a noteworthy achievement in the competitive landscape of Indian e-commerce.
The startup showcased a remarkable financial turnaround, reporting a substantial reduction in losses during the first half of the fiscal year. Meesho's losses narrowed to Rs 141 crore, marking a 90% decrease compared to the same period the previous year. Concurrently, the company witnessed a robust 37% increase in revenue, reaching Rs 3,521 crore on a year-over-year basis.
The transformation in Meesho's financial health is attributed to multiple factors. Increased app downloads, heightened transaction frequency, a diversified category mix, and a focus on enhancing monetization through value-added seller services have all contributed to the company's impressive growth.
Meesho's revenue from operations experienced a commendable 77% increase in the previous financial year, totaling Rs 5,735 crore. The startup also demonstrated operational efficiency by optimizing selling, general, and administrative expenses, improving from 53% of revenues in H1FY23 to 20% in H1FY24.
Apply to Xartup Fellowship Program
Get ₹1.5 Crore Technical Funding
However, achieving profitability wasn't without challenges. Meesho implemented significant cost-cutting measures, including layoffs. Since April 2022, over 700 employees have been laid off, with 251 employees being let go in May alone. The company's leaders acknowledged errors in over-hiring and organizational structure, emphasizing the need for a more effective and lean approach.
Despite these challenges, Meesho has secured over $1 billion in funding, currently boasting a valuation of around $5 billion, according to Fidelity Investments' latest valuation. The company remains focused on its growth trajectory, with plans to expand its seller base from the current 1.5 million to 10 million by 2027.
Meesho's success story is further underscored by its app download milestones, reaching an impressive 500 million in H1 FY23-24. The company attributes this growth to organic word-of-mouth momentum, fueled by a wide product selection and competitive pricing on its platform.
As Meesho continues to navigate the dynamic e-commerce landscape, its journey serves as an inspiration for other players in the industry, demonstrating that strategic focus, operational efficiency, and adaptability can pave the way for profitability even in a highly competitive market.