E-commerce unicorn Meesho, which is gearing up for its much-anticipated initial public offering (IPO) in the coming months, has significantly strengthened its margins over the past two years — largely driven by the rapid growth of its in-house logistics platform, Valmo.
Launched in August 2022, Valmo’s share in Meesho’s total order deliveries has surged from less than 2% in FY23 to an impressive 62% during the April–June quarter of FY26, according to the company’s updated IPO prospectus.
Solving the Value Retail Delivery Puzzle
Unlike larger e-commerce giants that cater to premium product segments, Meesho’s biggest challenge has been to profitably deliver low-cost items — such as a ₹200 kurta or a ₹99 home décor product — across 19,000 pin codes in India.
To overcome this, the company developed Valmo as an orchestration layer that connects thousands of third-party logistics (3PL) partners across first-mile, mid-mile, and last-mile delivery stages. Instead of building a standalone delivery service, Meesho’s model leverages existing players and integrates them into a tech-driven logistics network.
Valmo’s backend technology dynamically routes each order to the most cost-efficient logistics partner based on real-time data such as location, capacity, and carrier performance. This approach enables smaller logistics firms — which may not have end-to-end delivery capabilities — to collaborate seamlessly and fulfill e-commerce orders collectively.
Driving Cost Efficiency and Profitability
The results have been striking. Meesho’s order fulfillment cost — which includes logistics, warehousing, and delivery — dropped from ₹50.45 per order in FY23 to ₹37.70 in Q1 FY26.
This reduction in per-order costs has been a major factor behind Meesho’s turnaround from losses to positive free cash flow. The company generated ₹200 crore in FY24 and ₹591 crore in FY25, compared to negative levels two years ago. Its adjusted operating loss also narrowed sharply from ₹1,694 crore in FY23 to ₹219 crore in FY25.
Meesho’s contribution margin (as a share of net merchandise value) from its marketplace operations improved from 2.9% in FY23 to 4.9% in FY25, translating to ₹1,484 crore in FY25 compared to ₹566 crore two years earlier.
Empowering Sellers Through Lower Costs
“With declining fulfillment costs, we’ve been able to lower the average fees charged to sellers,” the company noted in its filing. “This allows sellers to price products more competitively and list lower-value items, attracting a broader consumer base.”
Risks and Scaling Challenges
Despite its success, Meesho acknowledged potential challenges in maintaining and expanding Valmo’s partner network. A shortage of logistics providers or delivery agents during peak seasons or in key regions could result in capacity constraints, delays, or unfulfilled orders.
Rapid Expansion of the Valmo Ecosystem
Valmo’s asset-light, aggregator model — which connects rather than replaces small logistics operators — has scaled rapidly since inception. As of Q1 FY26, Valmo’s network included 13,678 active logistics partners and over 85,000 delivery personnel.
The platform handled 763.5 million orders in FY24, up from 224 million in FY23, and crossed 295 million shipments in the first quarter of FY26, underscoring its pivotal role in Meesho’s logistics strategy and profitability improvement ahead of its IPO.
