A 10 per cent drop in valuation will not impact the path to profitability for e-commerce firm Meesho, which expects the bottomline to be in black in FY24.

US-based Fidelity Investments has cut the valuation of the Bangalore-based company by 10 per cent to $4.4 billion. Fidelity had co-led Meesho’s $570 million funding round in September 2021 at a valuation of $4.9 billion.

“Our last round of fundraise was in September 2021. A lot has changed since then. The broader e-commerce industry as a whole, if you look at the listed players valuation, it has come down by 50-70 per cent in the last few years. Our value change is about 10 per cent of which 4 per cent is because of ESOP issuance.

“We don’t worry about this and our focus continues to be on execution in delivering metrics from a financial profitability perspective,” said Dhiresh Bansal, CFO at Meesho.

Bansal said that the company had changed gear to focus on profitability along with growth and expects to reach a net breakeven in the ongoing fiscal. A public offer is expected to follow profitability based on the market conditions.

“During 2021, we saw an immense opportunity as a lot of Indian shoppers started to come online.

“We raised capital from various investors and utilised that to significantly grow the customer base. As a result our GMV (gross merchandise value) grew by almost 20 times between 2021 and at present. We changed gears starting middle of last year to say that profitability is as important as growth,” Bansal said.

“Between January 2022 and last quarter, we cut down our cash burn by close to 90 per cent. That meant we had to increase revenues from our services to our sellers and also optimise cost and we continue to be on this path. Our expectation and aim is to be profitable within the current fiscal year (FY24) and do that on a net profitable basis,” he said.

Meesho currently has 11 lakh sellers of which 50 per cent is from tier 2 locations. It has posted a 79 per cent increase in seller registration this year.

The e-commerce platform currently has a headcount of around 1300 employees on the corporate side after the company restructured its workforce by laying off 251 employees.

Bansal, however, said that once the company turns profitable it will look at hiring options in areas where the company will continue to invest.