IPO-bound online marketplace Meesho has reported one of the strongest free cash flow positions among scaled e-commerce businesses in India for FY25. The company’s Last Twelve Months (LTM) free cash flow has turned positive after a sharp turnaround from previous losses. Meesho moved from negative Rs 2,336 crore to a surplus of Rs 1,032 crore including interest income, and Rs 591 crore excluding interest income.

The shift reflects the growing impact of technology-based marketplace models that generate liquidity without heavy capital requirements. Platforms that do not build or own logistics, warehouses, or private labels are increasingly reporting stronger cash generation compared to traditional e-commerce players. Investor filings highlight that asset-light marketplaces are positioned to scale faster while maintaining low capital intensity, a factor now seen in Indian internet businesses.

Meesho operates on a marketplace model that avoids inventory ownership, manufacturing, warehousing, or logistics control. The business instead uses third-party sellers and delivery firms, reducing operational spending and infrastructure risk. This allows the platform to expand at scale without adding significant assets, improving the ratio of growth to capital requirements.

Asset-Light Growth

According to its UDRHP, marketplace businesses worldwide benefit from operating leverage once network density improves. The supply of sellers and logistics partners enables scalable growth where additional demand does not require proportional infrastructure spending. This strengthens free cash flow, return on capital, and profitability over time.

Global technology companies have already demonstrated the financial impact of such models. PDD Holdings (Pinduoduo) generated $16.6 billion in free cash flow in FY24. MercadoLibre reported $1.3 billion of adjusted free cash flow supported by combined commerce and payment operations. Uber Technologies produced $6.9 billion, while Airbnb delivered $4.5 billion with a free cash flow margin around 40 percent.

These companies share a model driven by technology-led marketplaces that convert scale into liquidity. Once a platform reaches critical density, further growth boosts cash margins, while capital intensity remains stable. The same financial trend is now emerging among Indian platforms that adopt a marketplace structure instead of traditional e-commerce assets.

Cash Generation Strategy

Meesho plans to expand its free cash flow further by accelerating scale and improving monetisation through a wider seller base, deeper category penetration, and increased efficiency in demand aggregation. The company aims to use network effects, operating leverage, and low capital requirements to strengthen liquidity. With more transactions flowing through a marketplace model, incremental costs reduce relative to revenue, allowing cash reserves to grow alongside scale.

The platform’s cash generation approach comes at a time when global technology markets have shifted from “growth at any cost” to profitability and strong unit economics. The emphasis has moved from expansion through cash burn to expansion driven by improved margins and disciplined spending.

Meesho IPO

Meesho’s improving cash position is expected to support its upcoming public market plans. The company is preparing for a market listing, and its strong liquidity profile may appeal to investors seeking scalable, profitable digital businesses. With marketplaces gaining favour for demonstrating financial efficiency, Meesho’s asset-light strategy could emerge as a central part of its IPO narrative as Indian public markets evaluate new technology offerings.