While the Indian ecommerce industry is still reeling from the aftershocks of the Flipkart-Snapdeal merger deal falling apart at the very last moment. Venture capital experts in India are of the opinion that the decision taken by troubled ecommerce to end merger talks with the Indian ecommerce leader Flipkart might actually work out in favour of the latter.

For a while now, Flipkart's focus has been divided on running its shop and executing the deal, but with the deal now in the dumpster, the Bengaluru-based firm could now focus its full attention on putting a tough fight for global ecommerce giant Amazon which is trying to take over Flipkart's numero uno throne in the country.

The fallout of talks between the two ecommerce firms came as a big surprise to many as the deal negotiations were in its last stage. In fact, a meeting was scheduled to take place in Bengaluru on Monday between the two parties to tie up loose ends of the deal. The meeting was eventually cancelled late on Sunday by Snapdeal.

Not only did Snapdeal terminate merger talks with Flipkart, it announced its plans to pursue an independent path for now and called off all strategic discussions as a result. In fact, Snapdeal founders Kunal Bahl and Rohit Bansal are now boosting that the company will come out of the troubled reputation it has earned in the last couple of years and earn a gross profit of whopping Rs 150 crore within next 12 months (Read Here).

While Snapdeal founders might have taken a stance to stay independent, SoftBank Group Corp, the ecommerce firm's largest investor has decided to continue its talks with Flipkart for an investment worth a whopping $1.5 billion.

Back in the day, when the merger talks were still in its infant stage, SoftBank's founder Masayoshi Son had claimed that the Flipkart-Snapdeal merger will prove to be a win-win situation for both the homegrown e-commerce players. It was also reported that Son, whose company owns about a third of Snapdeal parent Jasper Infotech Pvt. Ltd. was contemplating infusing another $500 million in Flipkart. But, now it seems, even with the merger talks dropping dead, SoftBank has decided to continue with its plans of investing in Flipkart and has in fact upped its investment capital from $500 million to $1.5 billion. The capital can help Flipkart in getting ahead of the game from the deeply pocketed Amazon.

According to experts in the Indian ecommerce industry, it was sweet deal for Snapdeal whose monthly gross sales has dropped to less than Rs 350 crore in the recent past. In fact, the Indian e-commerce marketplace has cooled off a lot since 2016, showing clear signs that there isn't much space left for many retailers in the country.

Snapdeal received a total of two offers from Flipkart for an all-stake acquisition in July. While Snapdeal rejected Flipkart's initial $850 million buyout offer citing that the offer made by the ecommerce leader undervalued their company, Flipkart made a second try at acquisition by making a second offer of around $900 million-$950 million, which was ultimately rejected by Snapdeal on Monday.

According to a Reuters report, while the board of Jasper Infotech, which runs Snapdeal, had approved Flipkart’s second offer, the deal was awaiting an approval of smaller shareholders, which never came. Reportedly, the shareholders weren't happy with the term sheet furnished by Flipkart as it was laced with a lot of 'hold backs' and 'clauses.'

In addition to Flipkart, Snapdeal had reportedly also received a merger offer from Ahmedabad-based Indian internet and e-commerce conglomerate, Infibeam. According to media reports, Infibeam had even furnished a term sheet for the deal, which had valued Snapdeal at USD 1billion, which was the initial asking price asked for the e-commerce marketplace.

Flipkart on Tuesday also concluded absorbing eBay India. According to experts, Snapdeal's acquisition might have added unnecessary burden to on the current ecommerce leader on absorbing a complicated asset that would be of little value in business terms. Hence, Snapdeal actually did good to Flipkart by drooping the ball on the deal.

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