Meesho, the SoftBank-backed social commerce platform, is gearing up for its ₹5,400 crore initial public offering (IPO), with a price band of ₹105 to ₹811 per share, targeting a valuation of around ₹50,000 crore. Ahead of the listing, the company’s leadership outlined its revenue model, profitability approach, and growth strategy.

Revenue Model and Profitability

Vidit Aatrey, Chairman, Managing Director, and CEO of Meesho, explained that the platform generates revenue from services offered to sellers, with logistics and advertising as the primary income drivers. He emphasized that the company’s focus on profitability is measured by free cash flow, rather than just accounting profits. “The most important metric for us is free cash flow,” Aatrey said, adding that Meesho has been free cash flow positive for the past two years and plans to maintain that while expanding operations.

Despite reporting a first-half adjusted EBITDA loss of ₹551 crore due to accelerated growth, the management stressed that the expansion is driven by a better value proposition and shorter payback periods, which have encouraged faster customer acquisition.

Growth Strategy and Cost Efficiency

CFO Dhiresh Bansal highlighted a sharp drop in customer acquisition costs over the past three years. He also noted that advertising revenue has significant headroom for growth as Meesho scales.

CTO and Whole-time Director Sanjeev Kumar said the company will continue investing in logistics efficiency, cost reduction, and technology, including artificial intelligence (AI). Part of the IPO proceeds will be allocated to marketing campaigns to attract users in new regions.

Customer-Centric Approach

Aatrey reiterated that Meesho will not introduce a platform fee to boost near-term profits, emphasizing the importance of maintaining customer trust. “It takes a lot of effort to earn the trust of your customers. Anything which goes against some of those principles, we will not do,” he said.

IPO Valuation and Investor Focus

On valuation, Bansal stated that the board set the price band to appeal to long-term domestic and global institutional investors, aiming for a balanced and sustainable shareholder base. “We believe it’s an attractive one, and we will see it play out,” he added.