Social media giant Facebook has increased its investment in reselling platform Meesho, as India’s ecommerce market continues its rapid growth.
After initially investing in the Indian startup in June, Facebook has now taken part in a Series D funding round which has raised $125m to support the company’s expansion plans.
The funding round was led by Southern African internet group Nasper, with investors such as SAIF, Sequoia, Shunwei Capital, RPS and Venture Highway also taking part.
Facebook reportedly invested between $20m and $25m in the startup earlier this year. It is unconfirmed how much the social media platform has increased its investment by in the latest funding round.
Meesho, which provides a way for sellers to connect with customers through social media platforms such as Facebook and Instagram, currently boasts more than two million sellers across 5,000 towns in India.
India’s fast-growing ecommerce market
According to the India Brand Equity Foundation (IBEF), India’s ecommerce market is the fastest growing in the world. Rapid digital transformation is set to add millions of new internet users over the next few years, which will continue to push the market value up from an estimated $38.5bn in 2017 to $200bn by 2026.
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Ecommerce giant Amazon and the Walmart-backed Flipkart have already cemented their place at the top. Both reportedly hold a 30% share of the market, and they are continuing to invest heavily in order to increase that. Amazon is tipped to see 23% growth in the market annually until 2027.
However, according to Ajit Mohan, managing director of Facebook India, Meesho provides a unique opportunity for those hoping to invest in the Indian market. Rather than competing with Amazon and Flipkart, Meesho’s users are predominantly based in smaller cities and towns, and don’t fit the typical demographic of Indian internet users.
“A platform that is aimed at India 2 [outside of major cities] and has such as large user base of women – when most people online in India are predominantly men – is a remarkable achievement,” Mohan told TechCrunch.
Meesho will use the additional funding to continue its expansion outside of India’s major regions, providing service to remote parts of the country that aren’t currently serviced by more established ecommerce marketplaces.
Facebook had not backed any Indian startups prior to Meesho. However, the Silicon Valley giant is reportedly monitoring this space and interested in investing in other startups that can strengthen its position as India’s internet market blossoms.
Interest in social ecommerce platforms in particular is rising, and Meesho, as a leader in the space, is attracting attention. According to Livemint, the startup is in discussions with Japanese conglomerate SoftBank over a potential $200m investment.