Bengaluru: Venture Highway, one of the early investors in Meesho, said it has sold a portion of its stake in the ecommerce startup to India-focused investment fund WestBridge Capital signalling investor interest in the Indian startup ecosystem despite the ongoing funding winter.
Venture Highway did not disclose the size of its stake sale or the proceeds from the transaction. The firm, however, said it made more than 50 times returns on its investment in Meesho from its first “vintage” fund.
ET reported on September 29 that WestBridge Capital was looking to buy about 2% stake in Meesho at $3 billion valuation through a secondary transaction. Venture Highway held about 3% in Meesho prior to the stake sale, said a person in the know.
“Having firmly believed in Meesho’s culture and founding principles, it has been a pleasure to be part of its journey since inception. We have closely witnessed how the company disrupted and transformed India’s online e-commerce landscape with its unparalleled vision. We continue to remain excited for the company’s success, especially, on its mission to democratise internet commerce for everyone,” said Neeraj Arora, founding partner at Venture Highway.
Venture Highway first invested in Meesho in 2015. The exit comes just days after Venture Highway cofounder Samir Sood stepped down as a partner of the firm. At the same time, it appointed Priya Mohan as the managing partner.
Meanwhile, WestBridge has been active in funding technology startups such as listed SaaS firm Freshworks, ecommerce firm Dealshare, edtech PhysicsWallah and Lead, among others.
SoftBank-backed Meesho was last valued at nearly $5 billion in 2021 following its $570 million funding led by US-based Fidelity and B Capital. Typically, secondary transactions take place at a discount to the previous primary valuation.
On August 7, Meesho said it posted a profit on a consolidated basis after tax for July, without disclosing specific numbers. ET had reported in April that Meesho was trying to reduce its cash burn to save capital and had readjusted growth expectations accordingly. It is said to be on an annualised revenue run-rate of around $750 million.
The secondary stake sales come at a time when big-ticket, growth stage deals continue to be rare in the Indian startup sector. However, late-stage startups are seeing secondary transactions between investors. FirstCry and Lenskart are among companies that recently closed secondary sale of shares, onboarding new investors.