How Did Meesho Spur New Models of Innovation?

Meesho - the start-up that is revolutionizing the community commerce segment in India.


Meesho is a Bangalore-based social commerce platform founded in December 2015 by graduates of IIT Delhi, Vidit Atre and Sanjeev Barnwal. It allows small businesses and individuals to open their online stores through WhatsApp, Facebook, Instagram, etc.

Meesho, which actually means ‘Meri Shop‘ (my shop), equips possible entrepreneurs with a practical digital shop. The company offers distribution access to 20,000 manufacturers through its platform. Meesho was one of three Indian companies selected for the Y Combinator in 2016. It was also part of the first batch of the Google Launchpad – Solve for India programme. In June 2019, it became the first Indian start-up to be invested in by Facebook.

Meesho Innovation Spree – Turning People into Digital Shopkeepers

Meesho has over 2 million people who it has successfully transformed into digital shopkeepers. The app allows users to set up online stores with over 21,000 small and medium-sized vendors offering new product categories such as clothing, jewellery, home kitchens, etc. Users can market these products on the network through Facebook, Instagram and WhatsApp. Meesho receives a 10% to 20% sales commission on transactions.

Many ‘providers’ that are part of the Indian domestic household have a knack for business. With Meesho, they are granted the financial freedom to conduct business with the Meesho app without leaving home. These entrepreneurs do not usually have the capital to buy raw materials and indulge in simple brick and mortar trading centres. So, Meesho merchants don’t have to carry inventory; suppliers drop-ship items after they’re ordered. 

Resellers can send payment links directly through social media, including WhatsApp. A relatively new sector is opening up in India with the massive leap in the country’s 4G infrastructure over the years. There are currently 2 million resellers and 700 cities in India and Indonesia on Meesho’s channels.

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New start-ups can tap the opportunity in connecting local and small businesses with large audiences using WhatsApp, Facebook, Instagram and other platforms.

Meesho’s Innovation and Fervent Funding Liftoff

Raising money for a business is not easy. And the time it took for Meesho to raise Series A funds and the resulting confusion was challenging. Meesho received its first institutional loan of $3 million from SAIF Partners in 2017. This was followed by a funding round of $10 million from Sequoia Capital. Slowly, Facebook and Naspers also got on board.

Many investors did not believe in Meesho’s business model and saw it as new. But one thing that worked for the social trading platform was the user pull it gained. Although the start-up was unable to raise funds, it continued to snowball. Investors who didn’t consider investing initially suddenly revamped their decision as they saw the numbers grow. The idea of selling WhatsApp around 2016 and 2017 was very new, and no one had tried it yet.

Innovating Community Commerce

While the venture capital industry initially did not quite figure out the workings of offline community commerce, it saw a great opportunity in Meesho’s innovative models. On top of that, Meesho users have shown great gratitude for changing their business and lives effectively in so many ways, further encouraging the base of innovation.

And with this right time, funding and innovation of the digital marketplace, Meesho spurred new models and platforms for businesses across the spectrum to run smoothly and reach broad audiences.

What can start-ups learn from Meesho?

Meesho’s business model can clearly be a standard for aspiring entrepreneurs aiming to start out in the community commerce segment. While many aspects of the industry have now come to the forefront, there aren’t many big players yet who have occupied the space.

New start-ups can tap the opportunity in connecting local and small businesses with large audiences using WhatsApp, Facebook, Instagram and other platforms. These platforms have dedicated services that encourage small businesses to grow using their means. A start-up can assist the millions of shopkeepers, kirana stores, bakeries, departmental stores, floweries etc. across India in realising their potential of mass reach. 

With the Atmanirbhar Bharat Abhiyan at its peak and the prime minister’s call to go “Vocal for Local”, it can be a great opportunity for new entrepreneurs to connect the MSMEs with their vast markets.

Aakash Sharma
Aakash Sharma
Aakash writes on Startup Ecosystem, Policies, Legal and Regulatory aspects of business planning. An alum of Delhi University, he is assistant editor at Dutch Uncles.

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