Meesho’s IPO plans: Rs 1,390 crore for cloud tech, Rs 1,020 crore for marketing growth, Rs 480 crore for AI hiring

Meesho Limited on Sunday announced that it has received approval from India’s market regulator for its initial public offering (IPO). The Bengaluru-based multi-sided technology platform, which drives e-commerce across India, has filed its updated Draft Red Herring Prospectus (UDRHP) with the Securities and Exchange Board of India (SEBI).

According to the updated filing, Meesho plans to raise up to Rs 4,250 crore through a fresh issue and an offer for sale (OFS) of up to 17.56 crore equity shares of face value Rs 1 each by selling shareholders.

The OFS will include shares sold by Elevation Capital V Limited, Peak XV Partners Investments V, Highway Series 1 (a Series of Venture Highway SPVs LLC), Y Combinator Continuity Holdings I, LLC, Golden Summit Limited, VH Capital, VH Capital XI (Corporate Selling Shareholders), as well as Meesho’s promoters Vidit Aatrey and Sanjeev Kumar, and individual shareholder Man Hay Tam.

Meesho's use of net proceeds

Meesho has intended to deploy the IPO proceeds towards inorganic growth through acquisitions and strategic initiatives, along with general corporate purposes.

A significant portion of the net proceeds, that is Rs 1,390 crore, will go towards investment in cloud infrastructure and technology. Another Rs 1,020 crore has been earmarked for marketing and brand-building initiatives, while Rs 480 crore would be used to cover salaries for existing and new hires in machine learning, AI, and technology teams.

Meesho IPO: E-comm platform earmarks Rs 480 crore to strengthen AI, tech teams, automation

Meesho's marketing strategy and spending

Meesho has underscored the importance of marketing in driving user growth, particularly in boosting “annual transacting users.”

The company’s digital marketing spend jumped to Rs 548 crore in FY25 from Rs 351 crore in FY24. In Q1 FY26 alone, Meesho spent Rs 227 crore on digital advertising.

Of its FY25 digital ad spend, Rs 207 crore went into performance marketing and Rs 57.8 crore into influencer collaborations. During Q1 FY26, Meesho spent Rs 86.6 crore on performance marketing and Rs 14.5 crore on influencer campaigns.

However, spending on traditional media declined to Rs 95.4 crore in FY25, from Rs 108 crore a year earlier as per the documents.

Overall, Meesho’s total advertising and promotional expenditure rose 40% year-on-year to Rs 643.5 crore in FY25 (from Rs 459.4 crore in FY24). The company spent another Rs 239 crore in Q1 FY26 alone.

Meesho mentioned that the increased marketing push translated into strong growth in users and orders in the recent years. The company's annual transacting users rose from 13.6 crore in FY23 to 19.8 crore in FY25, a 45.7% increase, while total orders surged from 1.02 billion to 1.83 billion during the same period.

The company has planned to deploy Rs 1,020 crore from the IPO proceeds towards marketing initiatives, allocating Rs 480 crore in FY27 and Rs 540 crore in FY28. Any additional funding needs will be met through internal accruals or debt, it said in its DRHP.

Meesho's financial performance

Meesho has significantly reduced its losses over the past two years. The Bengaluru-headquartered company's loss before tax and exceptional items narrowed from Rs 1,672 crore in FY23 to Rs 108 crore in FY25. The company’s net loss stood at Rs 3,942 crore in FY25, while it reported a net loss of Rs 289 crore in Q1 FY26.

Revenue from operations, however, has steadily risen--from Rs 5,734.5 crore in FY23 to Rs 7,615 crore in FY24, and further to Rs 9,390 crore in FY25. In Q1 FY26, Meesho recorded revenue of Rs 2,503 crore.

The platform’s annual transacting users grew nearly 28% year-on-year in FY25. Total orders climbed from 1 billion in FY23 to 1.8 billion in FY25, and reached 562 million in the quarter ended June 30, 2025--a 50% YoY increase.