Social media company Facebook is going to buy a stake in Meesho, an Indian eCommerce startup that connects people re-selling a variety of items with potential buyers on other platforms, according to a report from Reuters.
Citing Ajit Mohan, the head of the Facebook’s Indian business, the news outlet said the move is to extend the tech company's reach “in one of the world’s biggest internet markets.”
Meesho is a digital platform for re-sellers of items as diverse as jewelry to smartphones to reach prospective customers via social media platforms like Facebook, WhatsApp and Instagram. It has some 2 million entrepreneurs focused on India’s smaller towns and cities, the vice-president and managing director at Facebook India told the news service.
No details were available about how much Facebook is paying for the stake in Meesho, or the size of that stake. Meesho reportedly was founded in 2015 has raised some $65 million in capital so far.
Facebook's investment would help Meesho
The investment will help Meesho to further its efforts help people to build businesses, the firm said on its website.
India has been looking to increase regulation of social media platforms like Facebook and WhatsApp, and that could lead to increased monitoring requirements for such companies.
Earlier in June, Amazon put Rs 2,999 crores ($404 million) into its India business, which follows an infusion of $315 million half a year ago. The move illustrates the importance of India to Amazon. The company has been in the country for six years, and has so far spent upwards of $5.5 billion. The retail giant’s main rival is Walmart-owned Flipkart.
The competition was exacerbated by new rules that prohibited both companies from selling their own inventories, so they bought in bulk and sold to resellers, and bought stakes in companies that sold products on their own platforms. In February, a new law stopped that activity, resulting in hundreds of thousands of products disappearing from the sites.