Snapdeal may notch up as much as $1 bn from Softbank

Softbank has a 37% stake in China's e-commerce giant Alibaba, which recently created history when it went public

 

After Flipkart’s ‘Big Billion Day’, the next billion-dollar moment for Indian e-commerce is likely to come from Snapdeal. The Delhi-based e-commerce company is learnt to have secured a funding of as much as $1 billion from Japan’s Softbank Corporation. The announcement is expected to come from Snapdeal on Tuesday.

Incidentally, Japan’s Softbank Corporation CEO Masayoshi Son visited Prime Minister Narendra Modi and Communications & Information Technology Minister Ravi Shankar Prasad on Monday. Son assured Prasad of his company’s intent to invest heavily in India and that India was on the priority list of its investment destinations. Softbank has a 37 per cent stake in China’s e-commerce giant Alibaba, which recently created history when it went public.

It is also learnt that Softbank is looking to invest as much as $10 billion in India and chalking out a detailed plan for this.

Asked about its fundraising plan, Snapdeal declined to comment. Other key investors in the company include eBay, Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital, Temasek, BlackRock Inc, Myriad, Premji Invest and Tybourne and IndoUS Venture Partners.

The move comes at a time when Flipkart recently announced it was raising $1 billion and Amazon said it would invest $2 billion in India.

Snapdeal has raised $340 million in five rounds of funding so far and is valued at an estimated $1.2 billion. Founded in 2010 by Kunal Bahl and Rohit Bansal, the company works on a controlled marketplace model and has about 50,000 sellers listed on its website. The company recently got investment from Ratan Tata in his personal capacity. It has also tied up with Croma, a Tata group company focused on consumer electronics and durables, for an exclusive partnership.

The company has been keen to make further inroads into India amid tough competition from rivals like Flipkart and Amazon. According to sources, the company is planning to double its employee strength by next year and is also setting up an innovation centre in Bangalore.

While Flipkart and Amazon had their special Diwali offers in the weeks gone by, Snapdeal claimed it witnessed 15 times growth in traffic on October 6, the day Flipkart hosted its ‘Big Billion Day’ sale.

The company plans to have 500,000 square feet of transit space in the next 12 months. Acquisitions in payments, big data, and technology are among the other things Snapdeal is upbeat about. Same-day and next-day delivery will be further expanded to 15 cities this year.

SNAPPING IT UP

Increasing value

• With the fresh funding, Snapdeal’s estimated valuation is likely to rise from $1.2-1.5 billion to close to $2 billion
   
• Ratan Tata has invested in the Delhi-based company in his personal capacity
   
• Snapdeal has raised $340 million in five rounds of funding so far

Taking on rivals

• Flipkart, which recently announced it was raising $1 billion, is now valued at about $5 billion
   
• After Flipkart’s $1-billion fundraising announcement, Amazon had said it would invest $2 billion in India

The ‘Soft’ touch

• High on India, Softbank Corporation is planning to invest a whopping $10 billion here
   
• Softbank has a 37% stake in Chinese e-commerce giant Alibaba