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Social and ecommerce firm Meesho is nearing zero cash burn and is on track to achieve EBITDA breakeven this year. The company is already contribution margin positive, which excludes marketing and other indirect spends.

Meesho’s asset-light business model has helped reduce its costs, it said in a statement. It also witnessed a sharp rise in advertising revenue in the last eight quarters, which currently contributes 6% to its overall revenue. The company expects ad revenue to double over time.

Vidit Aatrey, CEO of Meesho, had said at YourStory‘s TechSparks 2022 that ad revenue will drive future growth for the company.

Meesho’s near-profitability comes at a time when in the ecommerce industry, larger players like Amazon and Walmart-owned Flipkart still finding ways to cut costs and improve their bottomlines.

The Bengaluru-based company logged 120 million active users in CY22, of which nearly 100 million users were added in the last two years. The user base’s strength is at least 55% of its rivals Amazon and Flipkart, according to brokerage firm Jefferies. Moreover, the monthly transacting user count rose 26x to 140 million in 2022 compared to the previous two years, resulting in a 9x increase in gross merchandise value (GMV), while it clocked one billion orders—up 2.2x year-on-year, Meesho said.

Recently, Meesho became India’s fastest ecommerce platform to onboard one million sellers, with more than six lakh small businesses signing up in the last year alone, according to the company.

“Over the last few quarters, we have seen rising traction with users across the country flocking to the platform,” Dhiresh Bansal, Chief Financial Officer at Meesho, said. “With economies of scale kicking in and our strong focus on profitable growth, we are very close to becoming EBITDA positive.”