Facebook picks minority stake in Indian social commerce startup Meesho

Here are the edited excerpts from the conversation.

Meesho is a three-way market place that connects suppliers, resellers and the part about it that really caught our attention was not just the explosive growth that they have had in the last couple of years, but that growth has been largely centered on tier-II and tier-III cities. They have two million resellers and the number has grown dramatically in the last year. More than 80 percent are women. So the Meesho social commerce model is fuelling entrepreneurship as well as it is fuelling women entrepreneurs.

So I think that was the primary reason for choosing Meesho. A lot of the work that we do every day is to help small businesses discover new markets, but here there is an opportunity to have an impact and really be an ally for India.

We are not disclosing the size of the financial investment. It is a minority stake, an equity investment, but it is also opening the door to engaging with Meesho to see how we can be supportive over the next few months and years.

We didn’t look at what they are transacting on our platforms. The real reason is it is an opportunity to fuel the India internet story where two entrepreneurs have created this exciting model that is taking commerce to the smaller cities and lighting up female entrepreneurship. So the lens was impact of that kind, the lens was not transactional in nature. We have no assumption that making an investment in Meesho will anyway change the commercial relationship.

I think two things. Firstly, Meesho is already a very successful company. We are glad to partner with them. Secondly, I think we will look for guidance from the Meesho founders in terms of support they want from us that can help fuel this entrepreneurship model and we will see if there are opportunities for us to do things together.

I want to also clarify that some of the answers that we discover while we work with Meesho will be available to other partners as well. So we are not looking at this as closing of opportunities for either Meesho to work with other companies and platforms or for us to work with companies like them independent of the category they are in.

I think the idea is there was an opportunity to fuel the model through a financial investment.

Without going into the evaluation process, I would be happy to talk about what excited us about Meesho. First, we thought the two founders had the right framework in terms of business building. They were bringing a lot of passion and problem-solving and testing and learning approaches that we as a company like.

Second, we like the fact that the impact was in tier-II and tier-III cities. Third, we can be even more of an ally for India, we can fuel the India internet story and even more, the kind of impact that they are having in lighting up female entrepreneurship.

I think the lens to the investment was fuelling a model that has serious impact and can transform lives. For me, two million resellers and more than 80 percent of whom are women in a very short period of time indicates the kind of impact that Meesho can have in India for job creation. So that lens was exciting. I think we will be open to opportunities across the board where there is similar impact. On the content front, the only point to make is that we have a lot of partners, large media companies, small media companies, creators, celebrities who work with us every day. So that agenda continues. We work closely with them and we are hopefully finding new ways to add value to them every day.

I think some of these answers are evolving. Predominantly the focus has been on acquisitions globally. The question in India is how we can be even more of an ally and in that context we have expanded the canvas a bit to say where there are opportunities to fuel companies like Meesho with financial investments. I do not think we are creating an India fund. The predominant lens is if there are opportunities to fuel India where we can be an ally in that growth.

The lens for me is very strategic. We are looking at parts of the internet ecosystem that we can fuel. What are the companies that are showing promise of impact like Meesho is doing on female entrepreneurship. It’s a strategic lens that we are applying, but there are people who work, who evaluate these opportunities but it is really looking at a framework of impact in India.

I look at it with a separate lens. There is work that we do every day in aiding small businesses. There is work in terms of helping new ventures. We are excited about the agenda of how can we further the agenda of improving access for women to the internet in India. So those programmes continue, but I would look at the investment lens that we are applying to Meesho separately. We are not going to use those programmes as feeder to the investments that we may make because those programmes exist on their own merit and we feel we can create a lot of impact there anyway. I would not go and mix the two up at the moment.

We will be thoughtful. We will be strategic but where there are opportunities to fuel and invest in businesses that can create massive impact in India, that is good for India, that is good for the India internet, we will explore those opportunities. We will look to work with ventures that see Facebook as an ally and where they see there is an opportunity for us to support them constructively.

We didn’t start with the lens of categories. We looked for interesting models that are emerging, that are innovative, some of them unique for India and they are scaling, they are solving for the new India that is showing up on the internet and they are creating massive impact. The minute you apply that lens, it does become category agnostic, it can happen in any category and I think where there is alignment with the Facebook mission of giving people the power to build communities, those become particularly exciting for us.

We haven’t spoken specifically about that. I think it is a fabulous team, they have done a fabulous job. I think where they pull us into conversations where they believe we can add value, we will engage deeply and positively.