Bengaluru: Two years after a failed merger with Flipkart and a subsequent turnaround of sorts, online marketplace Snapdeal is in initial talks to raise a fresh round of funding, said three people familiar with the matter, requesting anonymity. The talks are at a fairly early stage and investor names have not been finalized yet.
The development also comes just a month after Snapdeal’s acquisition talks with ShopClues fell through.
“They have been talking to some investors in the US, but there is nothing concrete yet," said one of the persons mentioned above.
If the talks materialize, it will be Snapdeal’s first external funding since May 2017, when it had raised an emergency round from existing investor Nexus Venture Partners, besides founders Kunal Bahl and Rohit Bansal.
It is also scouting for B2B firms to make acqui-hires or acquisitions in logistics and inventory management, among others, said three other people familiar with the company’s plans, requesting anonymity. It has held talks with at least one small tech company, said one of these people.
“One of the challenges Snapdeal faces is losing out on tech talent. Acqui-hire would be cheaper and a faster way to add tech talent," said another of the three familiar with the company’s plans.
A Snapdeal spokesperson, however, denied any plans for fund-raising or acquisitions.
In a separate development, Snapdeal said Piramal Group executive director Anand Piramal has invested an undisclosed sum in his personal capacity. “Snapdeal’s sharp execution in bringing great selection to the mass market segment in tier II-III cities has been quite successful," said Piramal. “Since 2017, Snapdeal’s revenues have grown rapidly with profitable unit economics," he said.
After the merger with Flipkart fell through, the company went through a series of changes as part of its ‘Snapdeal 2.0’ vision and scripted a turnaround. It cut costs and shed a chunk of its workforce and also sold its payments unit, Freecharge, and logistics company Vulcan to accumulate enough to execute Snapdeal 2.0. The idea was to cut costs and sharpen focus on un-branded products for tier II and III town consumers.
Snapdeal had narrowed its losses by 71% from FY18 to ₹186 crore in 2018-19. The company said 80% of its subscribers come from small towns and cities. It also claims that the platform has added more than 60,000 new sellers in the last two years, who have in turn added more than 50 million listings. Snapdeal has more than 500,000 registered sellers with over 200 million listings on the platform.