As Meesho prepares for its upcoming IPO, the company has revealed plans to allocate ₹480 crore from the public offering proceeds to pay salaries of its AI, machine-learning and technology teams — sparking debate over whether this is a forward-looking investment or a concerning use of investor funds. Business Standard
What Meesho’s IPO plan says
- In its Draft Red Herring Prospectus (DRHP), Meesho has earmarked ₹480 crore specifically for “payment of salaries of our existing and replacement hires for the Machine Learning and AI and technology teams.”
- Besides salaries, the IPO proceeds are slated to fund other areas: ₹1,390 crore for cloud-infrastructure investments, ₹1,020 crore for marketing and brand initiatives, with the rest going to acquisitions and general corporate purposes.
- The IPO opens for subscription on December 3, 2025. Meesho aims to raise about ₹5,421 crore total.
Why ₹480 crore for salaries — what Meesho aims to achieve
- The allocation underlines Meesho’s push to strengthen its technology backbone — particularly AI, machine learning and data infrastructure — to drive growth, personalization, and improved operations.
- As the company scales up — with growing user base and expanding services — investing in tech talent could help handle increased load, improve user experience and boost long-term competitiveness.
Debate: Is it a positive long-term move or a red flag?
✅ Why some see it as smart investment:
- Allocating funds for tech-team salaries shows Meesho is serious about long-term innovation and not just short-term growth.
- Strong investment in AI/ML and cloud infrastructure may help Meesho compete better with peers by improving operations, personalization and seller tools.
⚠️ Why others are sceptical:
- Using IPO proceeds for salaries (a recurring expense) rather than core growth initiatives can raise concerns about cost management and sustainability. As pointed out by some analysts, this kind of allocation in a public offer is among the largest personnel-related spends in recent Indian tech IPOs.
- If growth or monetisation doesn’t pick up, high salary costs could pressure profits.
What this move signals about Meesho’s future strategy
This allocation suggests that Meesho is prioritizing tech-driven growth over aggressive expansion or discount-based strategies. With fresh capital, the company appears to be doubling down on building a scalable, AI-powered infrastructure — rather than relying solely on marketing or aggressive discounting to attract users.
It also signals that Meesho expects a continued ramp-up in tech-staff — not just to maintain the platform, but to actively build new features, improve seller tools, and personalise user experience — which may help differentiate it from rivals in India’s competitive e-commerce space.
