SoftBank-backed e-commerce firm Meesho is aiming to raise Rs 5,421 crore through its initial public offering (IPO), which opens for subscription on December 3. The company has fixed a price band of Rs 105-111 per share, valuing the company at Rs 50,096 crore at the upper end. Co-founder and CTO, Sanjeev Kumar, speaks with Ayanti Bera about Meesho’s experiments in asset-light logistics, the future of AI in e-commerce, and the scale of opportunity in smaller cities. Excerpts:
Q. How does your low-cost local logistics, which you have termed as “Horizon 2”, work in practice?
A. Horizon 2 is where we experiment with new models and ideas, and once we build confidence in their long-term sustainability, they move to Horizon 1 and receive full investment. That’s exactly how Valmo, our logistics arm, and content commerce evolved. In the local logistics space, the focus is to build an entirely asset-light network. It’s not about fast deliveries; it’s about radical affordability. Our objective is to make low-price categories like groceries viable online by drastically reducing the cost of shipments. To make online groceries cheaper than offline, you must eliminate heavy capex such as warehouses and inventory. That’s the only way to drive costs down to the levels required for true mass adoption.
Q. Financial services also find a mention in your plans. What’s the roadmap there?
A. Globally, platforms like Shopee, Taobao and MercadoLibre have shown how rich marketplace data can enable smarter underwriting. In India, credit access is still limited to a small fraction of users, and most consumers and sellers don’t have a credit rating at all. Since we serve both sides of the transaction, we are uniquely positioned to help our capital partners make better lending decisions based on actual platform behaviour. We have already launched this offering with partners and are seeing promising early traction.
Q. Where is most of Meesho’s AI innovation focused right now?
A. Our ranking and recommendation systems are already strong. The big shift now is toward redefining the core shopping experience — making it far more conversational, intuitive and dynamic, much like interacting with a salesperson in a store. Our AI-driven customer support already handles the majority of chats and calls without human monitoring. We now want that same intelligence to guide customers, especially non-tech-savvy users, to navigate the app effortlessly and find the right products.
Q. Logistics cost per placed order has fallen from Rs 50.45 in FY23 to Rs 37.70 in Q1 FY26. Can this go lower?
A. Yes, there is still meaningful headroom. While we already operate with the lowest logistics costs, comparable markets like China are still at roughly one-third of our unit costs. Continued technology-led efficiencies, similar to the transformation we achieved with Valmo, will drive costs further down and unlock even more low-margin categories online.
Q. Do you see Valmo ever becoming a standalone logistics provider?
A. No. Valmo is a core part of our value proposition, making products affordable for the masses. Keeping logistics in-house ensures complete alignment with that mission.
Q. How does content commerce work and how does Meesho monetise it?
A. Sellers list products they want videos made for. Influencers choose products they want to work on, create short videos and post them on platforms like Instagram and YouTube Shorts as well as on Meesho. When a customer purchases through a video, the seller pays a commission that was pre-agreed with the influencer. For us, the contribution margin on content commerce orders is the same as any other transaction on Meesho.
Q. With a strong footprint in Tier-2 and Tier-3 cities, what does customer acquisition cost (CAC) look like?
A. CAC continues to remain low, and even with 234 million annual transacting users, the payback period is favourable. Roughly 70% of new users come to Meesho organically through word-of-mouth, which is a strong indicator of how deeply value e-commerce resonates in these markets.
Q. You’ve allocated Rs 1,000 crore to brand and marketing. What will be the focus?
A. There is still massive room for new user growth. In China, there is a heavy overlap between chat app users and value e-commerce users. In India, WhatsApp has around 800 million users, that gives a sense of the headroom. Our marketing will therefore focus on strengthening penetration in regions where we haven’t yet reached the critical mass needed for word-of-mouth effects, which have historically been our biggest growth driver.