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What started as an online daily deal company from Kunal Bahl's bedroom in New Delhi with just one computer is now a leading e-marketplace player backed by India Inc’s big names such as Ratan Tata and Azim Premji. Snapdeal, which turns five on Wednesday, has also attracted funds from Japanese investor SoftBank. And yes, the company has a string of offices lined up at the Okhla Industrial Area in high-value south Delhi now — the road is often referred to as Snapdeal Street.
It hasn't been a fairytale ride for Kunal Bahl and Rohit Bansal, co-founders of Snapdeal. In fact, the business pretty much went through several rounds of inertia. “Snapdeal turning five is a special moment for all of us. We could have never imagined we would come this far and be in a position to impact millions of small businesses and individuals in our country,” said Bahl. Pointing out the journey had not been easy, he said, the team had become stronger ‘’to ensure that the next five years are even more phenomenal’’.
It was in May 2008 that MoneySaver, a business around books, was launched with sales expectation of 500,000 units in one month, and so it did. But the founders were soon trying to ‘’revisit the model” . In less than six months, a mobile coupon service was unveiled. The business model was tweaked once more and in March 2009, a discount card called MoneySaver Prime was launched, which gave offers for 12 months. The sales target for three months was kept at 100,000 cards, but they could manage just about 75,000.
With growth kicking in, Bahl increased the headcount to 30. But soon, financial calamity struck the Delhi duo. Client payments were delayed and the company was left with Rs 53,000. At that time, it owed salaries worth Rs 50,000 on the next day. The founders managed to ride out the storm with their savings, and the company received a lifeline from Indo US Venture Partners as a $2 million funding. Then, Snapdeal was born.
A major breakthrough came last year when Japan's richest man, Masayoshi Son, chairman of Softbank, visited the Snapdeal headquarters after an investment of $627 million. Son is an investor in China’s Alibaba as well.
After clocking $2 billion gross merchandise value of sales last year, Snapdeal is confident of touching the $3 billion mark in the next two months. Its seller base has grown to 100,000, from just 1,000 in 2012.
Snapdeal has been active in inorganic growth too. It has bought five companies in the last four years and more acquisitions could be on the cards.
While it may seem a success story already for Snapdeal’s founders, this was just the beginning, co-founder Rohit Bansal said.
