Ratan tata to invest in snapdeal

India's ace business groups seems to be finding e-commerce in India as attractive ground for pouring their money in. First it was Infosys Narayan Murthy who formed JV with Amazon for new e-commerce entity, along came Aditya Birla Group who are all set to launch new e-commerce project in India, its now time for big old Tatas. If some rumors are to be believed, Rata Tata is planning on making a personal investment in the e-commerce firm Snapdeal. This news has come out a time when the e-commerce sector is booming like never before and making huge chunks of profit.

According to the sources, 76 year old Tata may end up buying an early investor in the e-commerce firm through secondary sale. This move by the emeritus of Tata Sons shows his sudden interest in the country’s emerging consumer internet story.

Rata Tata, the man responsible for transforming the country’s largest private sector conglomerate with the help of a string of huge global acquisitions, will reportedly just be a minority investor in his personal capacity in the e-commerce firm.

While Tata’s holding might not be that huge, it will for sure create the buzz for the four-year old e-commerce firm in the Indian and international market.

Reportedly, Tata had also visited Snapdeal’s headquarters in Delhi and addressed its employees a month ago.

Snapdeal, which is currently number 2 in gross merchandise sale by value- just behind Flipkart, could gain significantly from this investment. This investment would help the firm retain its number 2 position for which it is currently facing fierce competition from Amazon or even race ahead and beat Flipkart.

According to Accel Partners, this investment by Tata would be seen as a clear sign of how established business houses are becoming more and more interested in India’s booming e-commerce sector, which is all set to hit $9 billion in the course of next two years.

Flipkart, currently the number 1 position holder in the e-commerce scene in the country, has been successful in raising $ 1billion in funding last week. This funding was led by its existing investors which include Tiger Global, Accel Partners and Naspers.  Amazon gave a firm response to this investment by announcing a $2 billion investment the very next day.

Snapdeal has already had around two rounds of funding this year. This has resulted in taking the firm’s total capital raised to about $350 million at a valuation of billion dollars.

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