Gross Merchandise Value (GMV)

Gross Merchandise Value is the headline volume metric for marketplace, e-commerce, and platform businesses. It represents the full face value of every transaction facilitated — what buyers pay sellers, before the platform deducts its take rate or before any refunds are processed. A platform that facilitates ₹10 crore in transactions in a month has ₹10 crore GMV, regardless of how much commission it actually retains.

GMV matters because it captures the scale of economic activity flowing through the platform — the demand-supply liquidity that the business is enabling. For investors, a large, growing GMV signals that the marketplace is becoming the category's dominant venue. GMV growth also creates optionality: a platform with ₹500 crore GMV can introduce new monetisation layers (financial services, logistics, advertising) at a fraction of the unit-economics cost of building from scratch.

However, GMV is not revenue. The distinction is critical. A marketplace earning a 5% take rate on ₹10 crore GMV generates ₹50 lakh in revenue. Founders who conflate the two — or investors who are shown only GMV — risk a significant misvaluation. Most serious investors will immediately ask for the take rate, net revenue, and contribution margin alongside GMV.

Investors also watch GMV per transaction and repeat GMV from existing buyers to assess product stickiness. Rising average order values and high repeat-purchase rates signal that the marketplace is delivering genuine value rather than subsidising transactions through discounts.