New Delhi: Japan’s SoftBank Group Corp. is believed to have moved a step closer to securing the consent of investor Nexus Venture Partners for Snapdeal sale to Flipkart, the largest e-commerce firm in India.
A meeting of representatives of SoftBank and Nexus Venture Partners was held Tuesday and the impasse over the sale could end soon, people familiar with the matter said.
SoftBank—the largest shareholder in Snapdeal (Jasper Infotech Pvt. Ltd)—has been making all efforts to get Nexus Venture Partners on board for the sale of India’s third largest online retailer, and a breakthrough could come as early as this week, said the people quoted above.
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They added that while attempts have been going on for the past few weeks, Nexus Venture Partners finally seems to be warming up to the idea of a Snapdeal sale.
A board meeting is expected to take place Wednesday to deliberate upon the issue.
E-mails sent to Snapdeal, SoftBank and Nexus Venture Partners did not elicit any response.
An “yes" from Nexus Venture Partners is crucial for the deal to go through. The seven-member board of Jasper Infotech Ltd includes representation from investors SoftBank, Kalaari Capital and Nexus Venture Partners, as well as co-founders Kunal Bahl and Rohit Bansal.
Nexus Venture Partners and Kalaari Capital were early stage investors in Snapdeal.
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The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space and change the landscape of the sector that is witnessing intense competition among players.
People aware of the development had highlighted that valuation has been one of the hurdles in the deal, as Kalaari Capital and Nexus Venture Partners were not in agreement with the valuation given by SoftBank.
However, that could change soon after Nexus Venture Partners’s approval.
Kalaari Capital has already given its nod to the proposed arrangement.
Snapdeal was valued at $6.5 billion in its last funding round in February 2016. The valuation, however, has shrunk since then and the potential deal could be struck at a discounted rate.
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Indian e-commerce companies have seen funding dry up over the last few months as investors are focussing extensively on profitability and rationalisation of expenses.
With intense competition from deep-pocketed global rivals like Amazon.com Inc., companies like Flipkart and Snapdeal could face more heat in the coming days.
There have been reports that Snapdeal’s mobile wallet service Freecharge could be sold separately with players like Paytm and MobiKwik being in the fray.