Once a billion dollar e-commerce firm, Snapdeal on Tuesday said Piramal Group Executive Director Anand Piramal has made an investment in the e-commerce company. The investment has been made by Piramal in his personal capacity, Snapdeal said in a statement.
However, details of the investment and the valuation of Snapdeal post the transaction were not disclosed.
Anand’s investment comes as a significant endorsement for Snapdeal and the transformation the company has undergone over the last couple of years, Snapdeal co-founder and CEO Kunal Bahl said.
“His appreciation for what it takes to build a company with growing revenues with good economics in a competitive market comes from his own experiences of building and operating large companies in competitive sectors like real estate and financial services,” he added.
Snapdeal, which at its peak was valued at USD 6.5 billion around 2016, had raised funding from giants like SoftBank, Chinese e-commerce giant Alibaba and Canadian pension fund Ontario Teachers Pension Plan (OTPP).
However, it started losing market share to Flipkart and Amazon India as the rivals started pumping in millions of dollars to strengthen their position in the burgeoning Indian e-commerce market.
In 2017, SoftBank tried to orchestrate a merger between Snapdeal and Flipkart. Snapdeal, however, dumped the USD 950-million takeover offer from Flipkart and instead decided to pursue a fresh strategy – Snapdeal 2.0 – in the Indian market.
This strategy has helped Snapdeal narrow down its consolidated losses substantially over the last two years to Rs 186 crore in 2018-19 from Rs 4,647.1 crore in 2016-17.
The company has also been able to grow its revenues to Rs 925.3 crore in the last fiscal as compared to Rs 535.9 crore in 2017-18. Snapdeal’s sharp execution in bringing great selection to the mass market segment in tier-II and -III cities has been quite successful, leveraging the growing internet penetration in these geographies, Anand Piramal said.
“Since 2017, Snapdeal’s revenues have grown rapidly with profitable unit economics. With hundreds of millions of first time e-commerce buyers yet to transact, Snapdeal is well poised to grow in the future,” he added.
The company has sharpened its focus on the needs of the value-conscious buyers in India during the last two years, Snapdeal said. “More than 80 per cent of its users come from the small towns and cities of India. This market of nearly 400 million potential buyers is the fastest growing segment in Indian e-commerce,” it added.
In the last two years, Snapdeal has added over 60,000 new seller partners, and it now has more than five lakh registered sellers on its marketplace. PTI SR