Snapdeal valued at $4.8 billion after raising $500 million fresh funds

Alibaba, Foxconn and Softbank Group lead new round of funding in Snapdeal


Existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in this round. Photo: Bloomberg
Existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in this round. Photo: Bloomberg

India’s second largest e-commerce firm Snapdeal.com on Tuesday said it has raised $500 million in fresh funds, in a round led by Chinese e-commerce firm Alibaba Group, Foxconn Technology Group and existing investor Softbank Group.

The deal, which has been in the works since the start of the year, values Snapdeal at about $4.8 billion post money, according to official documents filed by FIH Mobile, a unit of Taiwanese contract manufacturer Foxconn.

Foxconn said it is buying a combination of new and existing shares worth $200 million for a 4.27% stake. It will infuse about $150 million as fresh capital for a 3.11% stake, and about 1.16% stake worth $50 million will be bought from eBay Singapore Services Pvt. Ltd.

Existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in this round.

“This investment in Snapdeal enhances our exposure to India’s burgeoning e-commerce industry. Snapdeal has a strong presence in mobile commerce and it fits our strategy of investing in innovative companies that are transforming the way people transact,” an Alibaba spokeswoman emailed.

Separately, an eBay India spokesperson in an email response to Mint’s query confirmed that the company has sold a portion of its investment in Snapdeal.

“Over the past two years, the valuation of Snapdeal has significantly increased. This sale will enable us to earn a strong return on our invested capital and strategically redeploy it into other areas of our business. We will retain a significant portion of our original investment in Snapdeal,” said eBay spokesperson in an email.

Mint reported in its 18 August edition that eBay Inc., among Snapdeal’s most influential shareholders, was looking to sell about a third of its stake in the next funding round of India’s second-biggest online marketplace, citing three people familiar with the plan.

According to eBay, India remains an important market for the company and going forward, it will focus on accelerating its own web and mobile presence in the country.

eBay, which is referred to as the lone “strategic investor” in Snapdeal’s official documents, is expected to channel the proceeds of the stake sale into its own India business. During the last six months, the company has significantly increased its investment in India, documents filed with the registrar of the company show. eBay has infused close to Rs.430 crore in eBay India Pvt. Ltd since March.

The US-based online marketplace held close to a 9% stake in Snapdeal, after Japan’s SoftBank Group in October announced a $627 million investment in the Indian company.

“We see this milestone as a significant endorsement of Snapdeal’s strategy and commitment to creating life changing experiences for millions of small businesses and consumers in India. With global leaders like Alibaba, Foxconn and SoftBank, in addition to our other existing partners, supporting us, our efforts towards building India’s most impactful digital commerce ecosystem will be propelled further, enabling us to contribute towards creating a Digital India,” said Kunal Bahl, co-founder and chief executive officer of Snapdeal.

Founded in 2010 by Bahl and Rohit Bansal as a deals site, Snapdeal, promoted by Delhi-based Jasper Infotech Pvt. Ltd, has become the biggest local rival to Flipkart.

The company has more than 150,000 sellers and about 15 million-plus products across 500 plus categories listed on its platform.

Snapdeal currently delivers goods to over 5000 cities and towns in India.

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