WestBridge Capital to acquire stake in Meesho through a secondary transaction

WestBridge Capital is reportedly negotiating to purchase a portion of Meesho through a secondary transaction. The venture capital firm is now looking to acquire a 1-2 percent share in the online retailer. In a secondary transaction an investor buys stake in a firm from an existing backer so the money doesn’t go into the company’s coffers. Most secondary transactions typically happen at a discount of about 25-30 percent from the company’s previous valuation. 

In the current transaction, WestBridge is looking to buy a 1-2 percent stake in Meesho from Venture Highway at a valuation of around $3-3.5 billion, or about 40 percent lower than what Meesho commanded during its last fundraise. The Bengaluru-based company had last raised $570 million at a valuation of $4.9 billion in September 2021. 

Venture Highway’s 5 percent stake in Meesho is now worth around $250 million. The transaction comes at a time when Meesho said it turned profitable on a PAT basis in the month of July. If the deal goes through, Venture Highway could be making a handsome exit since it first backed the company seven years ago and has participated in several follow-on rounds after.