TOKYO -- Meesho, an Indian e-commerce startup, on Monday said it raised $300 million from a group of investors led by SoftBank Group's Vision Fund 2.
The deal valued Meesho at $2.1 billion, according to the company. Existing investors including Prosus Ventures -- the venture capital arm of Prosus, formerly known as Naspers -- and China's Shunwei Capital also participated.
In an interview with Nikkei Asia, founder and CEO Vidit Aatrey said he will use the proceeds to "double our tech and product team over the next 12 months" as well as investing in marketing and in new offerings like grocery delivery.
Founded in 2015, Meesho operates a marketplace that mainly sells products made by small businesses and entrepreneurs, who are often women. Instead of directly connecting the seller and buyer, resellers using Meesho can recommend products to their friends on social apps such as WhatsApp. The reseller can earn a commission if the friend buys the product.
The business model takes advantage of India's large number of WhatsApp users to boost its customer base. Meesho said it has "enabled over 13 million individual entrepreneurs to start their own online businesses with zero investment" and that its target is 100 million.
Meesho generates revenue by taking a small cut from each transaction, and it also sells advertisements to merchants that want to showcase their products more prominently.
Vision Fund 2, operating with $10 billion in commitments from SoftBank, has been ramping up dealmaking in recent months, but Meesho is its first announced investment in India this year. The first, much larger Vision Fund has invested in some of India's most well-known tech companies, including Paytm, Ola and Oyo.
One of the fund's e-commerce bets, South Korea's Coupang, recently went public with a market capitalization of more than $100 billion, delivering a large paper profit to SoftBank.
"SoftBank is a very high quality investor and they have been part of some of the largest e-commerce companies globally," Aatrey said. He added that he was struck by the "understanding . . . of the e-commerce market" shown by Masayoshi Son, SoftBank's founder and chairman, when the two met on Zoom as part of the funding round.