Google in Talks to Invest in Meesho

Google Considers Investment in Meesho

Google is reportedly in talks to invest more than $50 million into Meesho, an Indian social commerce startup. This potential investment follows Meesho’s recent successful fundraising round, where the company secured $570 million in financing.

Meesho's Business Model

The Android operating system developer has previously invested in over six startups within India. However, the investment in Meesho has not yet been finalized, according to sources.

Meesho functions as a three-party marketplace. It connects suppliers – including manufacturers and distributors – with resellers, and ultimately with customers through social media platforms like WhatsApp, Facebook, and Instagram.

Reseller Network and Growth

Resellers purchase products listed by suppliers and earn a commission on each sale made to customers. A significant portion, approximately 80%, of Meesho’s resellers are women.

The startup was founded with the goal of enabling women to initiate their own businesses without substantial initial capital. Despite facing challenges during the pandemic, Meesho has experienced a full recovery and achieved record growth in recent months.

Impact on the E-commerce Landscape

Meesho’s rapid expansion has prompted discussions within Flipkart, India’s leading e-commerce company, particularly concerning its own social commerce initiatives.

As of April, Meesho reported having 13 million entrepreneurs and over 100,000 suppliers utilizing its platform. Founder Vidit Aatrey indicated the company has since experienced a threefold increase in growth.

The Potential of the Indian Market

The investment is strategically important given India’s position as the world’s second-largest internet market. E-commerce, however, still represents a relatively small portion of the overall retail sector.

Analysts at Bernstein project the social commerce market in India to reach a value of up to $20 billion by 2025, a substantial increase from the estimated $1 billion to $1.5 billion in the previous year.

Empowering Small Entrepreneurs

Social commerce is seen as a powerful tool for empowering small entrepreneurs across India. Approximately 85% of sellers currently utilizing social commerce are small, offline retailers leveraging social channels for growth.

Google's Investment Strategy in India

Google has pledged to invest $10 billion in India over the next few years. Previous investments include Glance and DailyHunt. Furthermore, YouTube acquired the social commerce startup SimSim in July. Recently, Google also invested in the neobanking startup Open, based in Bangalore.

Google has not yet provided a comment regarding the potential investment in Meesho as of Thursday.