IPO-bound Meesho has contested the AWS-generated invoices, claiming that the services were subpar. The business has also contested the validity of AWS's online customer terms and conditions as well as the enforceability of the PPA's minimum commitment clauses.
Meesho IPO: Online retailer According to the company's latest draft red herring prospectus (DRHP), Meesho is involved in a legal battle with Amazon Web Services.AWS, a significant technology vendor, has alleged non-payment of some dues, according to Meesho's amended IPO DRHP submitted to the Securities and Exchange Board of India.
What is the reason behind AWS's allegation against Meesho?
AWS has initiated an arbitration against Meesho, alleging that the latter has failed to pay invoices under a special pricing arrangement that was agreed on February 25, 2022.
According to the DRHP, "Amazon Web Services India Private Limited (AWS) has initiated arbitration proceedings against our Company before a three-person arbitral tribunal in New Delhi (Arbitral Tribunal) under the Arbitration and Conciliation Act, 1996, as amended, for alleged non-payment of invoices raised by AWS pursuant to a private pricing addendum (PPA) dated February 25, 2022, executed between AWS and our Company."
AWS is claiming ₹127.45 crore ($14.44 million) in this case, which includes the amount of the spend commitment shortfall payment, outstanding service fees, interest on the corresponding payments, and arbitration costs.
How has Meesho responded to this?
How has Meesho responded to this?
Meesho has contested the AWS-generated invoices, claiming that the services were subpar. According to Meesho's DRHP, the business has also contested the validity of AWS's online customer terms and conditions as well as the enforceability of the PPA's minimum commitment clauses.
In addition to asking AWS to reject the claim, Meesho has requested ₹86.49 crore in damages for losses brought on by AWS's poor support and business interruption, salary costs associated with switching from AWS-provided services, interest, and other expenses.
Why does Meesho care about cloud services?
Why does Meesho care about cloud services?
Cloud service providers are essential to the IPO-bound Meesho. According to the DRHP, these companies' inability to fulfill their responsibilities on time poses a significant risk to the company and could have a serious effect on its operations.
In addition to off-roll staff or contractors, such as key account managers for seller support, on-ground staff for Valmo, and other support operations, Meesho depends on a number of third-party service providers, including cloud service providers, call center operators, and telephone operators.
About Meesho IPO
About Meesho IPO
According to Meesho's IPO draft documents, the business plans to raise money through a combination of offer for sale (OFS) and fresh share sales. While the OFS entails the selling of 17.5 crore shares by the promoter and other investors in the company, the fresh issuance is worth ₹4,250 crore.
The entire IPO size was not disclosed in the prospectus, but according to the Economic Times, it was between ₹5800 and ₹6600 crore.
In addition to paying the salaries of current employees and new hires for the Machine Learning, AI, and technology teams, the company intends to use the proceeds from the sale of new shares to invest in cloud infrastructure in Meesho Technologies Private Limited, fund inorganic growth through acquisitions and other strategic initiatives, and fund general corporate purposes.
In the fiscal year that concluded on March 30, 2025, the company's consolidated loss before unusual items and tax decreased from ₹315 crore to ₹108 crore.
In the fiscal year that concluded on March 30, 2025, the company's consolidated loss before unusual items and tax decreased from ₹315 crore to ₹108 crore.
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