In April 2021, a SoftBank-led funding round of $300 million vaulted meesho into the unicorn club with a $2.1-billion valuation — a 3X rise since 2019. The Bengaluru-based firm, founded six years ago by IIT-Delhi alumni Vidit Aatrey and Sanjeev Barnwal, focusses on bringing small-time businesses in Tier-II and III cities online, and boasts of over 17-million resellers, including 15-million women. The biggest player in a nascent market, meesho — short for meri shop — operates an online marketplace, connecting sellers with customers on social media. According to Sensor Tower, at 100 million, meesho has been the most downloaded app on Google Play as of July 2021, ahead of Google, Amazon, Flipkart. Bain & Co. & Sequoia Capital say the social commerce platform is likely to clock in a valuation of $70 billion by 2030.
Vidit Aatrey (V.A.): We started together at IIT Delhi. After college, I worked with ITC for a couple of years and then with InMobi for a year. Sanjeev was in Tokyo working for Sony as a software engineer. Then in 2015, we started speaking to each other. Both of us were interested in launching a start-up together. We created a list of ideas. We were thinking of creating something more affordable for the next 100-million consumers in India. We thought, let’s focus on small businesses. The majority of the retail sector in the country was unorganised, and almost all of the small businesses were offline. It looked like a large opportunity.
Sanjeev Barnwal (S.B.): One of the challenges was to find the right en- gineers to build the system — people who are flexible enough to get on with the new feedback and try out new features. We spent time making sure our hires were a particular type of people who were able to deliver that.
Make Or Break Moment
V.A.: When we launched, we didn’t even have a website or an app. For the first six months we were running WhatsApp groups. Homemakers and women influencers, who we call resellers, would come to us and ask for new products. People would send their orders on WhatsApp. It was incon- venient, but because we were solving such a core problem for them, they were coming back to us. That was the Eureka moment when we realised this was the thing we wanted to build.
The Business Model
V.A.: We started to experiment with lots of models. We spoke to a lot of small mom-and-pop shops in Bengaluru. Most of them had hyper-local demand. Since we were focussing on categories such as fashion and lifestyle, we thought of a local commerce app in fashion. We did that for about six months and realised that in a category like fashion, local selection in itself is not enough. When people are browsing online they will always prefer a Myntra because they can see the selection across the country, whereas on our app you can only see what’s available in your pincode.
Then, we thought of an online shop builder for small shops. We tried that for about a year. It didn’t work because we realised for most of these small businesses, offline shops are primary and online is secondary. By that time we were close to exhausting our Series A funding.
Finally, we got our third model right. We were trying to give a shop of their own to small businesses. Meri shops together became meesho.
V.A.: A majority of our users don’t update their app in a month. So, how do you give them the best experience? Maybe through a combination of web- views with your native codebase wherever you can afford, to make sure you can iterate on the new features instead of going through the entire update cycle. Our app size — 10-12MB — is one of the lowest in the industry. Our audience doesn’t have a lot of space on their phones. So, if your app takes a lot of space, they uninstall it. These are very unique technology problems for this particular set of audience and we kept solving them ahead of time.
S.B.: The only way to solve Internet-related problems is to predict the things that the user wants to load, and then try to cache it in advance. For example, changing the resolution of photos and videos to the current Internet bandwidth or the speed stability that you have is one such way. We had a lot of learnings, specifically on the product side, because of the kind of technology we were going after. Our customers are not very tech savvy. They are very unique in terms of the kind of Internet connections they have, the phones they run, which are low on memory. So, when you build a product for them, it has to be very simple. A lot of thinking went behind making sure the app becomes usable in an unstable Internet, specifically on a low-end device.
V.A.: The most important thing was getting the right people who can build the right culture. We were very clear from day one what kind of people we wanted, who will become our 1st, 5th and 10th employee, because if you get the early team right, they try to hire people like them and that sets the foundation for a great organisation. From the early days we’ve had this val- ue called user-first. The product that we built was never built for ourselves— from day one, it was for homemakers. Understanding their problems is a very difficult thing unless we listen to them from close quarters day in and day out. One of the things we have done from day one is to get people who are very comfortable in speaking to users, those with a very problem-first mind-set because you are creating a category that did not exist before.
V.A.: Fundraising in the early days was very hard. The reason was simple — we were trying to do something new. Most people thought, a business that was dependent on housewives and homemakers, how big will it ever be? But, as we kept growing, we proved them wrong. We were able to build a cap table (equity capitalisation table), which is one of the best in the country. We have the best VC and the best growth-stage investors such as SoftBank, Naspers, Sequoia, etc. Once people realised the potential, the best investors in the country wanted to come and invest in us.
Marketing & Sales Lessons
V.A.: Before our series A, we couldn’t spend a single penny on marketing because we didn’t have any money. But we realised that women who wanted to have their shop online were part of a number of Facebook and WhatsApp communities. Since we didn’t have money to run FB and Google ads, we spoke about meesho on these platforms. That was a good hack.
When Did You Think You Had Arrived? V.A.: I don’t think I have ever felt that we have arrived. We always feel that our best work is ahead of us.
S.B.: Every milestone we have achieved, every fund-raise we do gives us comfort that we are moving in the right direction. But there’s a lot to be achieved going forward.
Riding Through Toughest Times
V.A.: Twelve months before we raised our series A, because we were running out of money. When we raised money, we had one-two months of salary money left. If we hadn’t done it in time, we would have had to shut shop.
V.A.: Our vision is to bring 100-million small businesses online and make them successful. India has the largest number of small businesses globally, but the number of those that have gone online is less than a million. The goal is still very far away, I don’t think it will happen in less than a decade.The pandemic has helped us in moving towards that goal faster. As of today, we have more than 200,000 sellers on our platform. For the next few years we want to be aggressive towards our goal and not think much about profits.