Snapdeal.com, arguably the largest e-commerce firm in India, said today that it has raised $500 million in fresh funds in a round led by Chinese e-commerce giant Alibaba Group, Foxconn Technology Group and existing investor Softbank Group. Notably, the rumor mills was going around about Snapdeal funding since early of this month and now finally the funding has been announced by Snapdeal itself, later today.
Other existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in this round of funding.
With this funding Alibaba Group, Foxconn and Softbank, the three world’s biggest technology companies, showed vote of confidence in Snapdeal, which in October last year got a $627 million investment from SoftBank, also an early backer of Alibaba.
“This investment in Snapdeal enhances our exposure to India’s burgeoning e-commerce industry. Snapdeal has a strong presence in mobile commerce and it fits our strategy of investing in innovative companies that are transforming the way people transact,” an Alibaba spokeswoman said in a statement.
Going forward, eBay which held close to a 9% stake in Snapdeal, has sold a portion of its stake and would focus on boosting its own business in the country. EBay has invested in several Snapdeal financing rounds, including a $133.7 million round it led in 2014.
“Over the past two years, the valuation of Snapdeal has significantly increased. This sale will enable us to earn a strong return on our invested capital and strategically redeploy it into other areas of our business. We will retain a significant portion of our original investment in Snapdeal,” said eBay spokesperson in an email.
Separately, FIH Mobile, a unit of Taiwan’s Foxconn, the trading name of Hon Hai Precision Industry Co , said it bought a 4.27 percent stake in Snapdeal for $200 million via its Singapore-based subsidiary Wonderful Stars Pte.
As per reports the freshly raised funds would now value Snapdeal at more than $5 billion. Snapdeal’s closest rival Flipkart is valued at around $15 billion while Amazon, which turned 20 last week, has completed two years in India, where its business is now worth at least $2 billion in gross merchandise value on the e-commerce side.
According to a Morgan Stanley report, India is fastest-growing market globally. While India has fewer internet users than China, online sales could rise to more than $100 billion in 2020 from $2.9 billion in 2013.
Founded in 2010 by Kunal Bahl and Rohit Bansal as a deals site, Snapdeal, promoted by Delhi-based Jasper Infotech Pvt. Ltd, has become the fastest growing e-commerce company in India with gross sales over 3 billion dollars annually.
The company has more than 150,000 sellers and about 15 million-plus products across 500 plus categories listed on its platform. Snapdeal currently delivers goods to over 5000 cities and towns in India.