A letter from our CEO, Vidit Aatrey

Dear Shareholders,

In 2015, Sanjeev and I watched India's e-commerce platforms compete to serve primarily affluent consumers through branded products. Meanwhile, 85% of India's retail was served by local manufacturers and MSME sellers who were excluded by both platform economics and complexity. And so were their consumers. We asked a question that seemed naive: what if we could build a platform not for the top 50 million Indians, but one that truly Democratised Internet Commerce for Everyone? That question became our mission, and that mission became Meesho.

Eleven years later, we now serve 274 million consumers and enable business growth for 1040k sellers annually. Many are first-time e-commerce users. We have made participation in e-commerce affordable and accessible for consumers and sellers who couldn't meet traditional e-commerce requirements. I'm humbled by how far we've come and energised by how much remains. To everyone who made this possible; our sellers who bet their businesses on us, our consumers who have trusted us, our employees who built Meesho through cycles of uncertainty, our investors who have backed us, and now our public shareholders who have entrusted us with capital – Thank you. This is not a milestone we take lightly.

Becoming a public company expands our accountability and how we demonstrate it. Every quarter, we will explain what happened and why. We will share our frameworks, our reasoning, our mistakes. If you understand how we think, you can evaluate whether we are thinking correctly and hold us accountable when we are not. But being public does not change what we optimise for. We will not sacrifice platform health for quarterly optics. We will not pretend that accounting profits are the same as cash generation. The same discipline that brought us here will guide us going forward.

Our Mission and Why It Governs Every Decision

Meesho exists to Democratise Internet Commerce for India. This is not a tagline; it's the barometer for every decision we make. Internet commerce cannot be democratised if prices remain high or adoption barriers prevent participation.

We make e-commerce both affordable and accessible to all Indians:

We have built the lowest cost channel for sellers to reach customers by reimagining e-commerce. We fundamentally reduce logistics costs, automate seller operations and encourage competitive pricing on the platform through business model and technology innovations. Our scale of order volume adds advantage through better terms of trade with our vendors and operating leverage in fixed costs.

We meet users where they are. We started Meesho as a WhatsApp-based platform, enabling commerce through an interface millions of users already understood. This significantly lowered friction for first-time e-commerce users and enabled adoption beyond digitally native urban consumers. We continue to innovate on this axis. Our app performs equally well on low-end smartphones and in low-bandwidth environments. We enable participation through recommendation-led shopping that reduces reliance on search skills, supported by easy cataloguing, multi-lingual interfaces, and image and vernacular voice experience.

Every decision at Meesho gets tested against one question: Does this make internet commerce affordable and accessible to a billion Indian consumers and millions of businesses? If the answer is no, we don't pursue it, regardless of near-term financial optics.

Flywheel First

Our philosophy is to build healthy platforms with self-reinforcing flywheel effects, and profitability follows. Optimizing short-term profitability at the expense of destabilising our flywheels could create a fragile business that struggles to sustain results. We evaluate our flywheels through three lenses:

• Commerce Flywheel – Is our consumer base increasing? Are consumers returning to our app more frequently? Are sellers growing their businesses? Are their economics sustainable? Can they invest in selection and quality because they trust the platform?
• Logistics Flywheel – Is delivery density improving? Are logistics partners growing? Are we building structural cost advantages?
• Content Commerce Flywheel – Is our creator base increasing? Are creators growing their earnings? Are they creating content more frequently?

When these elements are healthy, profitable growth is an output. When they are unhealthy, any profits are borrowed from the future.

This is fundamentally different from businesses that grow by adding more of the same through capex. A platform that is twice the size in terms of consumers and sellers; interactions and transactions does not merely have twice the efficiency; it develops structural cost and network effects that are difficult to replicate. Platform businesses exhibit increasing returns to scale, which is why we prioritise growth today: to build compounding advantages that translate into durable profitability.

Thinking Long-Term

When we started, we looked beyond what existing e-commerce players were serving. We experimented and learned our way to where we are. But we are still early in our mission. We are solving problems no platform has solved before. So, we codified long-term thinking into our operating structure. Not just as a Meesho Mantra, but as how we actually allocate resources and make decisions.

We organise our resources and capital across the company into two horizons.

Horizon 1 (Scale): Initiatives or businesses with proven economics and demonstrated payback. H1 comprises our proven bets, where teams focus on scaling further. Impact from investing more resources or capital in these initiatives is expected to accrue within a year.

Horizon 2 (Experiment): Experiments with unproven traction and economics, expected to drive long-term impact. The objective is learning, not scale initially. We define learning objectives upfront and test through controlled experimentation to establish product-market fit and economic viability before scaling.

Teams run small-scale H2 experiments on questions that push the current boundaries: Can we reach users and sellers who do not have access to affordable credit? Can agentic commerce create value? Can a voice-guide that performs reliably in low-end devices help non-tech savvy users onboard faster?

Our logistics platform started as an H2 experiment with a question: Can the future of e-commerce logistics lie in orchestrating thousands of local entrepreneurs who know their streets better than any centralised infrastructure could? Our creator marketplace began the same way: Can creators drive discovery and conversion better than traditional browsing? Both graduated to H1 after proving economics and demonstrating we could scale them.

How we deploy capital?

Capital is deployed for H1 initiatives only when investments clear long-term Free Cash Flow return thresholds. If returns deteriorate, investment is reduced or withdrawn, regardless of the near-term topline impact.

We cap total H2 spending annually as a learning budget and define explicit learning goals upfront. We dedicate a portion of our team's bandwidth to Horizon 2 initiatives which are reviewed periodically. This framework ensures we are systematically discovering future opportunities while maintaining spending discipline on unproven bets.

How We Measure Progress

Our Free Cash Flow per share captures what accounting metrics often miss: working capital discipline, capital intensity, and the actual cash generated after reinvestment. Our negative working capital cycle and asset-light model create structural cash flow advantages and avoid capital intensity that has historically destroyed returns in consumer-facing business. We use the following metrics to assess our performance, guide operational and financial decision making, and measure progress against our strategy:

Net Merchandise Value (NMV)

NMV refers to the cumulative checkout value of successfully delivered orders to consumers on our marketplace in each period inclusive of all taxes. It reflects the true value delivered to the consumer rather than the vanity metric of GMV. We evaluate all metrics as % of NMV.

Contribution Margin (CM)

As a pure-play platform, our marketplace revenue and costs are fundamentally different from inventory led or other traditional retail businesses. Contribution Margin helps identify the profitability generated from our operating activities by measuring the marketplace revenue earned from sellers, net of cost directly attributable to Placed Orders.

Contribution Margin is our unit economics profitability metric. It shows whether the underlying transaction economics generate cash, not just whether we're growing NMV. Critically, it distinguishes real product-market fit from growth manufactured through discounts and subsidy.

Last Twelve Months Free Cash Flow (LTM FCF)

Many consumer businesses report EBITDA as a headline metric while deploying significant capital into warehouses, fulfillment centers, logistics infrastructure and inventory. The cash consumed by these investments never appears in the headline metric. Asset-light platforms like ours expense similar investments in building capacity through aggregation; cost is visible in the period it occurs, while benefits to the platform accrue long-term.

EBITDA excludes capital expenditure and working capital requirements, both of which materially influence cash generation in consumer facing business. For the last 3 years, we scaled our business by 2.6x Placed Orders without consuming capital in the normal course of business.

We focus on Free Cash Flow because it reflects what actually remains after re-investment. We monitor LTM FCF closely and consider it in our decision-making processes. Decisions such as investments into marketing and technology are evaluated through the lens of their impact on FCF generation in the long-term.

We consider trailing twelve months FCF to normalise for the inherent seasonality in the business. We believe it truly reflects the health of the business, without being distorted by accounting profitability that can mask the underlying capital intensity and long-term value creation dynamics.

Closing

There is enormous work still to be done.

We are India's largest e-commerce platform in terms of Annual Transacting Users. The opportunity ahead is larger than what we've built. India's internet commerce penetration is still single digits. Hundreds of millions of consumers and millions of small businesses remain outside the digital economy. They want to participate. No one has built for them. We have. And we're just getting started.

Every percentage point of that gap we close represents tens of millions of people participating in internet commerce for the first time, and tens of thousands of small businesses reaching customers they could never have reached before. This is the opportunity we are building toward. Not to capture a larger share of existing e-commerce, but to expand what e-commerce can be in India.

Sincerely,

Vidit Aatrey | Founder and CEO