Meesho, a Softbank-backed e-commerce unicorn, has reported a significant financial turnaround. In the second quarter of FY24, the company achieved its first consolidated profit after tax.
While the exact profit amount for the July-September period wasn’t disclosed, The startup’s performance marks a notable achievement in the e-commerce sector.
Substantial reduction in losses
During the first half of FY24, Meesho reported a dramatic reduction in losses to Rs 141 crore, a 90% decrease year-over-year. The improvement was accompanied by a 37% increase in revenue, totalling Rs 3,521 crore.
The company’s financial health has been bolstered by various factors, including increased app downloads and transaction frequency, a broader category mix, and improved monetization strategies.
Revenue growth and operational efficiency
Meesho’s revenue from operations saw a 77% increase in FY23, reaching Rs 5,735 crore. Additionally, The startup has optimized its selling, general, and administrative expenses, which improved to 20% of revenues in H1FY24 from 53% in H1FY23.
Profitability after layoffs
To achieve profitability, Meesho undertook significant measures, including workforce reduction. Since April 2022, the company has laid off over 700 employees, with 251 employees let go in May alone.
“As leaders, we made judgement errors in over-hiring ahead of the curve. At the same time, we could have run our org structure in a more effective and lean manner overall,” Aatrey earlier said.
So far, It has raised over $1 billion in funding and is valued at around $5 billion, as per Fidelity Investments’ latest valuation.
Focused on expanding seller base
Looking ahead, Meesho aims to expand its seller base to 10 million by 2027, up from the current 1.5 million. The company’s growth is also reflected in its app downloads, which reached a milestone of 500 million in H1 FY23-24. Meesho’s success is partly driven by organic growth, which is attributed to its wide selection and competitive pricing.
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Source:ISN
