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Friday, February 3, 2023

Meesho has half a billion dollars in bank despite cutting monthly cash burn to $4M

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In December, Meesho reduced its monthly cash burn to $4 million (Rs 30 crore). The e-commerce startup  still has around $500 million in its bank account.

According to a top company executive, e-commerce startup Meesho reduced its monthly cash burn to $4 million (Rs 30 crore) this month despite still having over half a billion dollars in its bank account.

In a year when investors throughout the internet start-up sector demanded that portfolio businesses demonstrate a clear path to profitability, the Softbank-backed company announced that it had reduced its monthly capital burn by 90% from $40 million (Rs 300 crore) in January this year. This comes despite Meesho’s financial records with the Ministry of Corporate Affairs, which Moneycontrol verified, showing that revenue increased fourfold to Rs 3,232 crore in fiscal year 2022, while net loss increased 6.5 times to Rs 3,248 crore.

According to Meesho’s Chief Financial Officer Dhiresh Bansal, the enormous loss in FY22 was caused by large investments made early in the year toward new customer acquisition and a shift from a reseller-led business model to a consumer marketplace. As a consequence, the e-commerce business reported that its mobile app had 273 million installations by 2022.

Its yearly transactional users increased by nearly 80% to 140 million, while the firm witnessed a record 910 million orders in CY22, an increase of 135%. By the middle of 2023, the firm hopes to be cash-flow positive and profitable.

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