Snapdeal to buy stake in GoJavas

New Delhi: Online marketplace Snapdeal, owned by Jasper Infotech Pvt. Ltd, is looking to buy a small stake in logistics firm GoJavas and has signed a long-term strategic agreement—a move that will help the company lock in a long-term partner for last-mile delivery.

“We confirm that Snapdeal and GoJavas have entered into a strategic partnership. We would like to clarify that this is not an acquisition or buyout as reported in some of the news articles today,” GoJavas and Snapdeal said in response to an email query sent by Mint.

Most large e-commerce companies such as Flipkart, Myntra and Amazon have their own last-mile logistics units to wield better control over the delivery time and experience.

However, Snapdeal has so far stayed away from putting in place its own in-house logistics and currently works with third-party delivery service providers such as Blue Dart, GoJavas, Ecom Express and many more.

“Snapdeal is looking at a strategic partnership with GoJavas, which could also include a single digit stake in the company,” a person aware of the development said on condition of anonymity. The deal is likely to be announced on Tuesday.

Mint could not confirm the value of the deal.

Founded in 2013, GoJavas is an Indian supply chain solution provider that serves around 30,000 consumers per day in 85 cities. It currently has clients such as Jabong.com, Fabfurnish, Healthkart, Yepme and Lenskart.

GoJavas has been looking for an investor for over a month now, according to a second person familiar with the deal. “The company was not looking for an acquisition as they do not want to lose out on other e-oommerce clients and market share,” he added on condition of anonymity. Snapdeal is in talks to buy online recharge and couponing service provider FreeCharge for an undisclosed amount, Mint reported earlier this month.

Snapdeal, which raised in excess of $1 billion last year from investors including Japan’s SoftBank Corp., is eyeing as many as five acquisitions in the technology space this year, Mint reported in February.

Last year, the Delhi-based company announced five purchases, including that of Doozton, a social product-discovery technology platform; gifting recommendation technology platform Wishpicker.com; group buying site Grabbon.com; online sports goods retailer eSportsBuy.com and online marketplace for handicrafts Shopo.in.

Online retail is expected to be worth $6 billion this year, a 70% increase over 2014 sales of $3.5 billion, according to technology researcher Gartner Inc. E-commerce represents less than 4% of the retail market, according to an October report by Gartner.