Japan’s Softbank has reportedly shown interest in leading a funding round of $100 million (~ Rs 711 crore) in Snapdeal, the Indian e-commerce firm run by Kunal Bahl and Rohit Bansal, reported several media outlets including CNBC-TV18.
The other investors who can also also contribute to Snapdeal’s upcoming round include a clutch of smaller Chinese and American investors.
According the report, SoftBank will give half or upto $60 million and the remaining will be given by other smaller investors. “It is unlikely that any of the other existing larger fund houses will participate in the round,” said the report citing an anonymous source.
Citing an another source, the CNBC report said, “Bahl did not believe that Snapdeal would see a day in 2018.” But, a lot has changed in the last two years. Snapdeal’s revenue rose by 73 percent to Rs 925 crore, and losses are down by 70 percent to Rs 186 crore, in 2018-19.
SoftBank, the report said, is convinced that there is a room for a third large e-commerce company in India after Flipkart and Amazon, especially after Paytm Mall’s ammateurish attempt to get pie of E-Commerce market. Chances for Snapdeal’s success has gone up because of the fall of ShopClues, which tried to capture the longtail of online retail space.
In 2017, SoftBank had attempted a sale to Flipkart, which both founders, Bahl and Bansal, opposed and the deal failed to get sealed and eventually Flipkart got out of hands of Flipkart’s founders’ as Flipkart got acquired by Walmart.
Softank’s failed attempt to merge Snapdeal with Flipkart led to a battle, where the founders clawed back control, reduced SoftBank’s number of board seats from two to one, and went off the radar to turn around the company.