Indian social commerce platforms are raising funds through IPO

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According to PayNXT360, the social commerce market in India is expected to record strong growth in 2022. Increased smartphone usage in India led to easy data proliferation, digital adoption, and digital financial literacy, providing impetus to the social commerce of the country. Consequently, Indian social commerce startups are utilizing the digital era to increase their market share through different strategies and investments. For instance,

In March 2022, Meesho, the Bengaluru-based social media platform, announced it will be completing its initial public offering by early 2023. Notably, the company is backed by Meta Platforms and SoftBank's Vision Fund 2. Meesho's customers are from the country's smaller towns and cities where various unbranded products, such as clothes, cosmetics, household appliances, etc., are quite popular. The company had successfully acquired nearly 8 million monthly users on its platform as of September 2021.

Moreover, the company raised funds from the search engine giant Google in October 2021. Google, which planned to invest around US$10 billion in India, had invested in various startups such as Dailyhunt and Glance. Furthermore, the social commerce company raised US$570 million in Series F funding in September 2021. In April 2021, the company got unicorn status after it raised US$300 million in a fundraising round that pushed its value to US$2.1 billion.

Meesho, through free ad credits and zero return shipping charges, had successfully onboarded nearly 250,000 sellers on its platform. The company also launched an e-commerce platform in October 2021. The company strategized with a 0% commission model to attract more sellers to its platform. The pivot from a social commerce startup with a reseller model to an e-commerce marketplace puts the company in direct competition with Amazon and Walmart-owned Flipkart, which are also trying to tap small-town consumers. The company is even eyeing to enter the grocery sector through Farmiso, an online platform to cater to 200 cities across India. 

Another social commerce startup, DealShare, raised US$45 million from Abu Dhabi Investment Authority (ADIA) as an extension of its Series E round in February 2022. The Jaipur-based company is planning for its initial public offering (IPO) within two years. The company, which is in more than 130 cities across ten states, aims to start operations in over 300 more cities and cater to 500 million new-to-internet users.

DealShare, which offers groceries, essentials, and home care products, targets middle and lower-income groups in the country. Notably, through a community group-buying model, this platform enables users in tier 2 and lower cities. The company targets the customer by providing products at competitive prices via a network of micro-entrepreneurs selling in local languages.