Indian e-commerce firm Meesho is making serious strides towards profitability by leaning on its in-house logistics network called Valmo, signalling a shift in unit economics and free-cash-flow performance.
Since its launch in August 2022, Valmo has grown from handling less than 2% of Meesho’s orders in FY ’23 to approximately 62% of shipments in the quarter ended June 2025.
The system works as an orchestration layer rather than a traditional captive logistics fleet: it connects thousands of third-party logistics partners across first-mile, mid-mile and last-mile operations.
By routing each parcel to the most cost-efficient carrier through backend technology, Meesho says it has cut fulfilment costs from around Rs. 50.45 (US $ 0.57) per order in FY ’23 to about Rs. 37.70 (US $ 0.43) in the quarter ended June 2025.
These savings have helped the company move from negative free-cash-flow two years ago, to generating Rs. 200 crore (US $ 22.72 million) in FY ’24 and Rs. 591 crore (US $ 67.14 million) in FY ’25. Meanwhile, its adjusted operating loss has narrowed significantly, from Rs. 1,694 crore (US $ 192 million) in FY ’23 to Rs. 219 crore (US $ 24.88 million) in FY ’25.
Meesho’s contribution margin from its marketplace business improved from 2.9 % of net merchandise value in FY ’23 to 4.9 % in FY ’25, which translates to contribution of Rs. 1,484 crore (US $ 168 million) in FY ’25 versus Rs. 566 crore (US $ 64.31 million) in FY ’23.
According to the company, the improved logistics efficiency allows it to reduce the cost charged to sellers, enabling more competitively priced products and hence attracting more consumers.
However, the company’s own IPO prospectus acknowledges risk: relying on a fragmented ecosystem of many delivery partners raises the possibility of capacity shortfalls or unfulfilled orders during peak periods or in underserved geographies.
As of Q1 FY ’26, Valmo’s ecosystem stood at 13,678 active logistics providers and over 85,000 delivery agents; in FY ’24 it processed 763.5 million orders (up from 224 million in FY ’23).
