 "Snapdeal")
Backed by Japan's SoftBank Group Corp, Snapdeal plans to spend more on logistics and technology to better compete with Flipkart and Amazon India
Online marketplace player Snapdeal said the $200 million investment it received would be utilised to strengthen its logistics, while some of the investment would also go into the financial technology (fintech) side of the business.
Snapdeal had on Sunday announced that Ontario Teachers’ Pension Plan, one of the world's largest pension funds, and Singapore-based investment entity Brother Fortune Apparel invested $200 million in the company.
“It is not a fund raising round per se. Fund raising happens when the company goes to investors to ask for more money. We have enough cash in bank right now and might not go for a fresh funding round anytime soon. This is the result of inbound interest by investors,” said a company executive.
Backed by Japan's SoftBank Group Corp, the firm plans to spend more on logistics and technology to better compete with Flipkart and Amazon India. It has already spent nearly $35 million to buy 50 per cent stake in logistics services company GoJavas.
Although the company has not earmarked money for investments in different verticals, it would spend a substantial amount in making its financial technology arm Freecharge stronger. “The growth of fintech is already happening in a phased manner. But, yes, the company would be investing more in Freecharge,” the executive added.
With this round of funding, Snapdeal’s valuation has gone past $6.5 billion, up from nearly $5 billion last August when it raised $500 million from a group of investors including Alibaba and Foxconn Technology. E-commerce major Flipkart’s valuation is pegged at nearly $15 billion. Snapdeal has raised nearly $2 billion so far.
Sources said the next round of funding might not happen anytime soon and the company does not plan to make any fresh acquisitions as well. “We continue to make targeted investments in building internal and external capabilities that will enable us to consistently deliver optimal experience for millions of buyers and sellers who transact daily on Snapdeal,” Anup Vikal, chief financial officer of Snapdeal, had said earlier.
Over the past two years, Snapdeal has made significant investments in technology and in complementary acquisitions in pursuit of its stated aim to build India’s most reliable commerce ecosystem.
Founded in 2010, Snapdeal has 275,000 sellers, 30 million-plus products and a reach of 6,000 towns and cities across the country.
Ontario Teachers is Canada's largest single-profession pension plan with $154.5 billion in net assets.
Snapdeal
Total funding: $2 billion
Number of rounds: 10+inbound investment
Investors
* Alibaba
* Foxconn Technology Group
* Blackrock
* SoftBank
* SoftBank Internet and Media
* Ratan Tata
* eBay
* SoftBank Capital
* Recruit Holdings
* Bessemer Venture Holdings
* Kalaari Capital
* Nexus Venture Partners
* Ontario Teachers' Pension Plan
* Singapore-based investment entity Brother Fortune Apparel
