Snapdeal Employees Protest Against Founders, Write To PMO, RBI Governor

A lot of things are happening in Indian e-commerce are as after series of events -- Snapdeal backed off merger with Flipkart thereafter Snapdeal's largest investor Softbank invested whopping $2.1 billion in Flipkart -- employees of Snapdeal have decided to protest by writing a joint letter to co-founders, Kunal Bahl and Rohit Bansal.

The employees -- both former and current -- have also sent copies of the letter to Prime Minister’s Office, Ministry of Finance and Governor of the Reserve Bank of India.

In a letter dated August 3rd, reviewed by Moneycontrol, the employees allege that the Plan B or Snapdeal 2.0 plan is not viable and would only keep the founders in-charge at the cost of a large number of employees.

To recall, after Snapdeal founders backed-off from merger with Flipkart and this whole lot of drama when finally ended the repercussions of failed merger went towards the company employees when it was reported that the company will layoff 80% of its employees. Although, it was never officially announced from Snapdeal.

"An independent inquiry into the affairs of this company would reveal how the interests of employees and possibly shareholders were destroyed to protect the interest of two people," the letter reads.

The letter further reads, "We saw a proud unicorn change into a troubled company. But we kept the faith and believed what you said - the employees of this organization are your "single biggest priority".

The letter has also been marked to the managing director of Axis Bank, among at least a dozen other recipients. Last month, Axis Bank announced the acquisition of Snapdeal's mobile wallet firm Freecharge in an all cash deal for Rs 385 crore.

Snapdeal has responded to the allegations in the letter. "The board has made no decision with regard to the team composition for Snapdeal 2.0. The company cannot comment on baseless, unsubstantiated allegations made by unidentified sources," said a Snapdeal Spokesperson.

Sources close to the recent developments said that it was the disagreement between the entire set of two dozen odd stakeholders that led to termination of merger talks. "Founders cannot be squarely blamed as they had only agreed to the possibility of a merger and a subsequent due diligence early on," said a source close to the merger talks.

To recall, 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.'

Related Reading - Why Snapdeal Cancelled Flipkart Deal In Last Stage

The letter from employees also questions the co-founders decision making with respect to some of the acquisitions and initiatives including the acquisition of logistics firm GoJavas.

In the letter, the employees seem to be unhappy about the founders' 2.0 plan. "It is a poisonous plan to destroy the organisation so that you stay in charge. So many people to be impacted for the sake of just two of you," the letter reads.

As per the 2.0 plan, Snapdeal is expected to lay-off about 600 people which could make it a leaner organisation

Kunal Bahl, co-founder, however boasted after calling quit with Flipkart deal boasted of making Rs 150 Crore gross profit in next 12 months.

According to the letter, the entire episode at Snapdeal has impacted around 40,000 people including Snapdeal's employees and their dependents.

"These are real people, not statistics. They are from different functions and they know what you have done," the letter further says.

While the letter seems to be a vent for the troubled employees, we couldn't independently verify the number of employees who have protested with the letter.

Snapdeal To Layoff 80% of Its Employees After Calling Off Flipkart Deal

Soon after calling off the merger deal with Flipkart, Snapdeal has now made its next strategy to go through a massive resizing. The struggling online marketplace now wants to run a leaner, meaner version of the organization, and will lay off close to 80 percent of its workforce, ANI reports.

A top official told the news agency that department heads were instructed to prepare a list of people who would be asked to leave. At present, Snapdeal has about 1,200 employees. If the Gurgaon-based firm goes through with its decision, it would be left with about 200 employees only.

This would be Snapdeal’s second major layoff exercise. Last year in July, it had slashed its workforce from over 9,000 to under 2,000 [Read Here]. It was one of the biggest layoffs in the India's startup space. And earlier this year, it fired 600 more employees in a bid to cut costs; the founders as well as some top executives had to forego their salaries. “We believe that every resource of the company should be deployed for driving us towards profitable growth and with this announcement, both Rohit and I are taking a 100 percent salary cut,” Snapdeal founder & CEO, Kunal Bahl, wrote in an email to employees.

According to a senior executive who remain wants to be anonymous, the company has plan to retain around 300 odd employees in the company.

Snapdeal is technically the first Unicorpse Startup of India as the troubled start saw its valuation falling down from $6.5 billion to less than $1 billion in a year or so.

Snapdeal now has cash reserves of Rs 385 crore ($60 million) from Axis Bank to which it sold its payments unit, FreeCharge. It further looks to gain about Rs 100-120 crore from the sale of its logistics unit, Vulcan Express. There are no buyers yet. And given Snapdeal’s knack of dilly-dallying, that could take long as well.

Notably, the amount of mistakes founders of Snapdeal had made can possibly make them the 'Yahoo' of India as by rejecting the $900 million merger offer from Flipkart can cost them a more setback in terms of valuation in future.

Flipkart Start Afresh To Acquire Snapdeal; To Make New $1Billion Offer

After getting refusal from Snapdeal for its $850 million buyout offer, Flipkart is expected to start afresh with new, revised and improved offer in the next few days for acquiring Snapdeal, according to sources close to Flipkart management but don't want to disclose their identity.

According to the source, the new improved offer is likely to be close to USD 1 billion to woo Snapdeal. Notably, the $1 billion ammount was the initial asking price for acquisition of troubled e-commerce marketplace.

Further, if the terms are accepted, the deal would be completed within a month or so. As Snapdeal has already got nod from all of its stake holders including smaller ones like Azim Premzi and Ratan Tata.

SoftBank, Snapdeal’s largest investor, has been proactively mediating the plausible acquisition deal for the past few months. The board of Snapdeal also has representation from its founders (Kunal Bahl and Rohit Bansal), Nexus Venture Partners and Kalaari Capital. Snapdeal is also engaged in separate discussions for selling its mobile wallet Freecharge, possibly to Airtel or Axis Bank and also selling its logistics arm Vulcan Express. These deals are also likely to be closed within this month only.

The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space. Snapdeal’s valuations have also plunged from about $6.5 billion in February 2016 to just $1 billion in April this year. SoftBank has already written off over $1 billion on valuation of its investment in Snapdeal

10 Must Know Startup News From The Week Gone By [03 - 08 July]

Missed the happening of startup world? Here is the recap for you. Mentioned below are the 10 news which made buzz during in the week gone by.

Homegrown E-commerce Giant Snapdeal Rejects Flipkart’s $850 Mn Buyout Offer

Flipkart, Snapdeal merger is taking twist and turns with time. Recently, Jasper Infotech owned Snapdeal’s board has refused the initial offer by Flipkart. E-commerce major, Flipkart has completed the due diligence process and has made an offer of $800-850 million to buy Snapdeal. But Snapdeal’s board felt that offer made by Flipkart undervalued the company. Snapdeal’s largest investor, SoftBank has been proactively mediating the sale for the past few months.

India, Israel Launches 5 Year Technology Fund

Prime Minister Narendra Modi’s visit to Israel has become the buzz of the town. The PM visit to Israel has further strengthen the relation between two nation by announcing the launch of a technology fund, the Israel India Innovation Initiative Fund, or I4F. The fund will focus towards growing the two countries’ business relations. In addition to the tech fund, the two countries also signed a total of seven accords aimed at boosting India and Israel’s cooperation in a number of crucial sectors right from agriculture and water to space research etc.

Not only this, the two countries have unveiled a bilateral innovation challenge that will see Indian and Israeli startups coming together to conceive solutions to fight some of the most critical challenges that the world is facing right now like water, agriculture and digital healthcare etc. The bilateral innovation challenge will be hosted on a new online platform called the India-Israel Innovation Bridge.

VC Investments in Startups Lowest in Last 3 Years, Decline By 25%

As per a report by Venture Intelligence, a research firm led by media entrepreneur Arun Natarajan, the quarter ending June saw venture capital investments in Indian startups decreasing by 25 percent from the figure locked in a year ago. The report highlighted that the venture capital investment amount in startups in India has decreased to $275 million in 78 investments from last year’s figure of #309 million in 104 deals. Venture Intelligence, which is considered as a leading source of information and analysis on private company financials, transactions and their valuations in India, also revealed that the June quarter was the lowest VC investment quarter seen by the Indian startup ecosystem in the last three years period.

WeWork Launches First Collaborative Work Space in Bengaluru

New York-based collaborative workspace, WeWork has launched its first community workspace in Bengaluru – ‘WeWork Galaxy’. WeWork targets two new centers’ in Koramangala and Whitefield respectively. The Bangalore launch also coincides with the opening of first location in Brazil (Sao Palo).

WorkSpace is well equipped to cater to 2200 members, powered by beautiful, functional work spaces, swimming pool and gym. The company is aiming to reach out to entrepreneurs, freelancers, SMEs and SMBs, startups across e-commerce, IT/ITES, retail, FMCG, healthcare, legal, and marketing segments amongst others.

Numaligarh Refinery To Assist Startups in Assam

Assam-based Numaligarh Refinery Limited (NRL) has decided to promote startups in Northeast India region. If we talk of the funds, initially, to assist startups, company has come up with a fund of Rs 10 Crore which will come as a grant for startup venture. Commenting on the development, P.Padmanabhan, Managing Director, NRL said, “We want to create entrepreneurship ecosystem in Northeast India. Once the ideas are submitted, jury will evaluate the same. We will evaluate if the project requires seed funding, scale up funding or any other assistance. We will tie up with incubation Centre.”

Flipkart Executives To Deliver Packages To Customers

E-commerce major, Flipkart has recently flagged off a program where its employees will visit customers across the Indian subcontinent in the month of July as a part of the company’s 10th anniversary celebrations. As a part of the program, Flipkart’s top executives, which includes its CEO Kalyan Krishnamurthy, and its employees across business functions will get an opportunity to personally visit a customer, especially in tier 2, 3 and 4 towns like Bhopal, Patna, Amritsar, Vijaywada, Guwahati, Cuttack, Nashik and Jamnagar to thank them for supporting the company for ten long years.

Shamik Sharma To Join pi Ventures As Venture Partner

Early stage venture fund, pi Ventures has appointed Shamik as a Venture Partner. He was previously the Chief Product and Technology officer at Myntra where he was responsible for driving technology strategy and culture. At pi Ventures, Sharma will work with portfolio founders to help them get past critical hurdles, design their product roadmaps and hire specialised talent. His role will involve supporting pi Ventures in deep understanding of technology and IP via technology deep dives of prospective portfolio companies and support in bringing interesting startups aligned with pi Ventures’ investment theme to their deal pipeline.

Capsula.Studio to Set Up a Startup Accelerator

Capsula.Studio at Tel Aviv University has partnered with a commercial vehicles seating and interiors company, Pinnacle Industries, to establish a startup accelerator, Pinnacle Capsula.Studio in Pune. The partnership aims to accelerate innovative entrepreneurs to market through Capsula’s proven ‘Mentored Customer Validation’ program and knowledge center which connect entrepreneurs with global value network players and the research community.

The Studio has been conceived as a not-for-profit entity which will be located at The BHAU Institute which is a part of the College of Engineering. It will act as a bridge between Indian and Israeli entrepreneurs and will allow novel ideas rapidly gain market traction.

Housing’s Rahul Yadav Joins ANAROCK Property Consultants

ANAROCK Property Consultants, which prominent real estate industry stalwart Anuj Puri launched last month has appointed Housing.com’s co-founder and ex-CEO Rahul Yadav as Chief Product & Technology Officer. Yadav’s experience in harnessing the consumer housing market at via technology will add the key element to the business.

Yadav, who will be based out of ANAROCK’s Mumbai offices in Bandra-Kurla Complex, assumes his new role from July first week and is already building his team of product and technology experts.

Edtech Startup BYJU’S Acquires TutorVista And Edurite

The creator of K-12 app, BYJU’S has acquired TutorVista and Edurite from Pearson. The partnership is focused on expanding international reach and creating a diverse product portfolio. Launched in 2015, BYJU’s has become one of the preferred education app for students across age groups with 8 million users and 4,00,000 annual paid subscriptions. With an average time of 40 minutes being spent by a student on the app every day from 1700+ cities and towns, the BYJU’S app is making learning enjoyable and effective. BYJU’S is making learning contextual and visual, and not just theoretical.

Now Snapdeal Rejects Flipkart’s $850 Million Buyout Offer

People were eagerly waiting for the merge of Snapdeal and Flipkart. But talk between the two rivals have taken a different turn as they have hit another hurdle. According to a media reports, Jasper Infotech owned, Snapdeal board has refused the initial offer. E-commerce major, Flipkart has completed the due diligence process and has made an offer of $800-850 million to buy Snapdeal. But Snapdeal’s board felt that offer made by Flipkart undervalued the company.

Commenting on the development, one of the source told PTI, "The first offer has been rejected but talks are still on. It is an ongoing discussion."

Snapdeal's largest investor, SoftBank has been proactively mediating the sale for the past few months.

Earlier this month, IndianWeb2 reported that Flipkart has completed its due diligence and has found everything okay and clean, but Flipkart has still not come back with a final number for the Snapdeal acquisition.

With the time ticking, if the deal doesn’t goes through in the next few days, the flailing Snapdeal’s board would have no choice but to either extend the timeline on the acquisition or start from the scratch again by putting the ecommerce site on the For Sale window again.

The merged entity is expected to give a major push to the current cut throat competition going on between Jeff Bezos’ Amazon and India’s very own homegrown e-commerce leader, Flipkart.

Flipkart To Close Snapdeal Acquisition Deal By Next Week: Sources

The Flipkart-Snapdeal merger, which is being deemed as India's biggest consolidation in the e-commerce sector, might finally get closed by next week. According to a news report in Business Standard (BS), sources close to the deal have informed them that Flipkart has completed its due diligence and has found everything okay and clean, but the number one homegrown e-commerce market leader has still not come back with a final number for the Snapdeal acquisition.

In the last one month, Flipkart has invested time in combing through Snapdeal 's book in order to make sure that everything being told to them during the deal was legit.

With the time ticking, if the deal doesn't goes through in the next few days, the flailing Snapdeal's board would have no choice but to either extend the timeline on the acquisition or start from the scratch again by putting the ecommerce site on the For Sale window again.

According to BS's source, the exclusivity clause that the two parties had entered will end next week and if Flipkart fails to come back to Snapdeal with an acquisition number, then SoftBank and other Snapdeal investors will have to take a combined decision on whether to extend the timeline or it can be open season.

However, people close to the deal are certain that the situation would not come to this as the deal will be finalised in the next few days with an official announcement taking place in the next week.

The merged entity is expected to give a major push to the current cut throat competition going on between Jeff Bezos' Amazon and India's very own homegrown e-commerce leader, Flipkart. Reportedly, Bezos' has recently decided to spend a whopping amount of $5 billion in India to gain significant share as the e-commerce market surges in the Indian subcontinent.

According to Masayoshi Son, SoftBank founder, the deal will prove to be a win-win situation for both homegrown e-commerce players. Sources inform that the Son, whose company owns about a third of Snapdeal parent Jasper Infotech Pvt. Ltd. could contribute that equity to the merged entity and infuse another $500 million to $1 billion in Flipkart through a transaction with Flipkart backer Tiger Global Management. The amount will give Flipkart more fuel to battle it out with Amazon.

The Japan-based SoftBank board is trying to bring everyone on the same page regarding the Snapdeal sale. Investment bank Credit Suisse, the firm which is advising Snapdeal on the merger deal, is also trying to get all Snapdeal's small shareholders onboard for the deal.

To recall, a week back, PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji, which is a small investor in Snapdeal, has sent a letter to the ecommerce site asking for clarity on how the rights of minority shareholders will be protected in the proposed deal (Read Here). It is important to be noted that PremjiInvest had demanded the clarification for the second time since the deal negotiations have been going through.

Not only is PremjiInvest seeking a clarification from Snapdeal on the rights of minority shareholders, but it is also reaching out to all the other minor investors in Snapdeal such as asset management company BlackRock and Singapore state investment firm Temasek to come together in unison and oppose any special payments being made to certain shareholders, including co-founders Kunal Bahl and Rohit Bansal and early backers Kalaari Capital and Nexus Venture once the deal concludes.

According to BS's sources, there are a lot of things in the tunnel being worked out around the big ecommerce merger. Reportedly, there are three separate sets of talks underway for the other firms under Snapdeal's parent Jasper Infotech brand. These firms are: Vulcan Express, FreeCharge and Unicommerce.

To recall, a month ago, we reported how after 3 months-long deliberations that included more than 15 board meetings and a giant payout of at least $210 million, the Japanese internet and telecom giant Softbank had finally made up its mind to merge its biggest Indian asset Snapdeal with India’s leading e-commerce giant Flipkart (Read Here).

Flipkart To Close Snapdeal Acquisition Deal By Next Week: Sources

The Flipkart-Snapdeal merger, which is being deemed as India's biggest consolidation in the e-commerce sector, might finally get closed by next week. According to a news report in Business Standard (BS), sources close to the deal have informed them that Flipkart has completed its due diligence and has found everything okay and clean, but the number one homegrown e-commerce market leader has still not come back with a final number for the Snapdeal acquisition.

In the last one month, Flipkart has invested time in combing through Snapdeal 's book in order to make sure that everything being told to them during the deal was legit.

With the time ticking, if the deal doesn't goes through in the next few days, the flailing Snapdeal's board would have no choice but to either extend the timeline on the acquisition or start from the scratch again by putting the ecommerce site on the For Sale window again.

According to BS's source, the exclusivity clause that the two parties had entered will end next week and if Flipkart fails to come back to Snapdeal with an acquisition number, then SoftBank and other Snapdeal investors will have to take a combined decision on whether to extend the timeline or it can be open season.

However, people close to the deal are certain that the situation would not come to this as the deal will be finalised in the next few days with an official announcement taking place in the next week.

The merged entity is expected to give a major push to the current cut throat competition going on between Jeff Bezos' Amazon and India's very own homegrown e-commerce leader, Flipkart. Reportedly, Bezos' has recently decided to spend a whopping amount of $5 billion in India to gain significant share as the e-commerce market surges in the Indian subcontinent.

According to Masayoshi Son, SoftBank founder, the deal will prove to be a win-win situation for both homegrown e-commerce players. Sources inform that the Son, whose company owns about a third of Snapdeal parent Jasper Infotech Pvt. Ltd. could contribute that equity to the merged entity and infuse another $500 million to $1 billion in Flipkart through a transaction with Flipkart backer Tiger Global Management. The amount will give Flipkart more fuel to battle it out with Amazon.

The Japan-based SoftBank board is trying to bring everyone on the same page regarding the Snapdeal sale. Investment bank Credit Suisse, the firm which is advising Snapdeal on the merger deal, is also trying to get all Snapdeal's small shareholders onboard for the deal.

To recall, a week back, PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji, which is a small investor in Snapdeal, has sent a letter to the ecommerce site asking for clarity on how the rights of minority shareholders will be protected in the proposed deal (Read Here). It is important to be noted that PremjiInvest had demanded the clarification for the second time since the deal negotiations have been going through.

Not only is PremjiInvest seeking a clarification from Snapdeal on the rights of minority shareholders, but it is also reaching out to all the other minor investors in Snapdeal such as asset management company BlackRock and Singapore state investment firm Temasek to come together in unison and oppose any special payments being made to certain shareholders, including co-founders Kunal Bahl and Rohit Bansal and early backers Kalaari Capital and Nexus Venture once the deal concludes.

According to BS's sources, there are a lot of things in the tunnel being worked out around the big ecommerce merger. Reportedly, there are three separate sets of talks underway for the other firms under Snapdeal's parent Jasper Infotech brand. These firms are: Vulcan Express, FreeCharge and Unicommerce.

To recall, a month ago, we reported how after 3 months-long deliberations that included more than 15 board meetings and a giant payout of at least $210 million, the Japanese internet and telecom giant Softbank had finally made up its mind to merge its biggest Indian asset Snapdeal with India’s leading e-commerce giant Flipkart (Read Here).

Flipkart-Snapdeal Merger Runs Into Trouble As PremjiInvest Objects

A month ago, we reported how the Flipkart-Snapdeal merger was finally happening with the only hurdle remaining a go-ahead from two of India’s most powerful businessmen magnets, Ratan Tata and Azim Premji. While back then it wasn't clear if these smaller investors in the company could act as a major road bump in the deal going through, but as it is turns out, PremjiInvest does have certain objections with the deal and has demanded a clarification on the same from Snapdeal.

According to a report by Economic Times, PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji, has sent a letter to Snapdeal asking for clarity on how the rights of minority shareholders will be protected in the proposed deal. It is important to be noted that PremjiInvest has demanded the clarification for the second time since the deal negotiations have been going through.

The ET report further added that not only is PremjiInvest seeking a clarification from Snapdeal on the rights of minority shareholders, but it is also reaching out to all the other minor investors in Snapdeal such as asset management company BlackRock and Singapore state investment firm Temasek to come together in unison and oppose any special payments being made to certain shareholders, including co-founders Kunal Bahl and Rohit Bansal and early backers Kalaari Capital and Nexus Venture once the deal concludes.

The report further revealed that the special payment amount being contested by PremjiInvest is $150 million, which is likely to be borne by the rest of the shareholders. This is, however, only possible if all the stakeholders in the firm decide to agree with the terms.

Meanwhile, a Bloomberg report is stating that PremjiInvest is raising an objection to a proposed special payment of $90 million. This constitutes $60 million being given to Kalaari Capital and Nexus and $30 million being given to Snapdeal founders. However, PremjiInvest isn't against the proposed special payment package of $30 million to be given out to Snapdeal employees.

The merger, which is being deemed as India's biggest consolidation in the e-commerce sector, took a long time to materialise initially mainly because of Snapdeal’s early-stage investor Nexus Venture Partners (NVP) not being happy with the payout being offered by the Tokyo-headquartered telecom and internet giant SoftBank but the latter finally got everyone on board.

Snapdeal’s smaller group of investors include PremjiInvest, Tata Sons' Ratan Tata, China’s Alibaba, Canada’s Ontario Teachers’ Pension Plan and Taiwanese electronics maker Foxconn. They own about 40% of Snapdeal, but do not enjoy board representation.

Recently, Nikkei Asian Review brought to fore that SoftBank, which has been heading the merger, had reportedly reached a broad agreement with stakeholders on the deal. It also said that the Japanese Internet conglomerate is looking to own about 20% of the combined Flipkart-Snapdeal entity and launch a fierce battle with global e-commerce giant Amazon in India.

[Top Image: Inc42]

Flipkart-Snapdeal Merger Runs Into Trouble As PremjiInvest Objects

A month ago, we reported how the Flipkart-Snapdeal merger was finally happening with the only hurdle remaining a go-ahead from two of India’s most powerful businessmen magnets, Ratan Tata and Azim Premji. While back then it wasn't clear if these smaller investors in the company could act as a major road bump in the deal going through, but as it is turns out, PremjiInvest does have certain objections with the deal and has demanded a clarification on the same from Snapdeal.

According to a report by Economic Times, PremjiInvest, the family investment arm of Wipro Ltd chairman Azim Premji, has sent a letter to Snapdeal asking for clarity on how the rights of minority shareholders will be protected in the proposed deal. It is important to be noted that PremjiInvest has demanded the clarification for the second time since the deal negotiations have been going through.

The ET report further added that not only is PremjiInvest seeking a clarification from Snapdeal on the rights of minority shareholders, but it is also reaching out to all the other minor investors in Snapdeal such as asset management company BlackRock and Singapore state investment firm Temasek to come together in unison and oppose any special payments being made to certain shareholders, including co-founders Kunal Bahl and Rohit Bansal and early backers Kalaari Capital and Nexus Venture once the deal concludes.

The report further revealed that the special payment amount being contested by PremjiInvest is $150 million, which is likely to be borne by the rest of the shareholders. This is, however, only possible if all the stakeholders in the firm decide to agree with the terms.

Meanwhile, a Bloomberg report is stating that PremjiInvest is raising an objection to a proposed special payment of $90 million. This constitutes $60 million being given to Kalaari Capital and Nexus and $30 million being given to Snapdeal founders. However, PremjiInvest isn't against the proposed special payment package of $30 million to be given out to Snapdeal employees.

The merger, which is being deemed as India's biggest consolidation in the e-commerce sector, took a long time to materialise initially mainly because of Snapdeal’s early-stage investor Nexus Venture Partners (NVP) not being happy with the payout being offered by the Tokyo-headquartered telecom and internet giant SoftBank but the latter finally got everyone on board.

Snapdeal’s smaller group of investors include PremjiInvest, Tata Sons' Ratan Tata, China’s Alibaba, Canada’s Ontario Teachers’ Pension Plan and Taiwanese electronics maker Foxconn. They own about 40% of Snapdeal, but do not enjoy board representation.

Recently, Nikkei Asian Review brought to fore that SoftBank, which has been heading the merger, had reportedly reached a broad agreement with stakeholders on the deal. It also said that the Japanese Internet conglomerate is looking to own about 20% of the combined Flipkart-Snapdeal entity and launch a fierce battle with global e-commerce giant Amazon in India.

[Top Image: Inc42]

BREAKING: Snapdeal Gets Rs.113 Crore from Nexus and Founders

In a surprise twist to troubled e-commerce firm Snapdeal, the company has received Rs.113 crore in an emergency funding round from existing investor Nexus Venture Partners and the company’s founders Kunal Bahl and Rohit Bansal, in lieu of its 2015 acquisition of Unicommerce eSolutions.

As per documents filed by Snapdeal with the Registrar of Documents, and accessed by corporate research and mentoring platform Tofler, Nexus Venture Partners was issued 14,810 preference shares, valued at Rs 96.26 crore while the founders -- Bahl and Bansal, were each allotted 1,300 Series J1 preference shares, which have a cumulative value of Rs 16.90 crore (Rs8.45 crore each) making a total of Rs 113 crores.

The funding round comes as a surprise as Snapdeal has been in talks to get acquired by its bigger rival Flipkart amid a boardroom battle involving its three most powerful investors and its co-founders.

It's not clear how the latest funding round, which increases Snapdeal runway by a few months, will affect the company’s talks with Flipkart for plausible sell out.

Nexus, one of Snapdeal’s earliest backers, has -- till date -- invested about $43-$45 million in Snapdeal, for about an 10% stake in the company. Nexus will now receive about $60 million, in lieu of its holding in the online marketplace, as a special payout.

Notably, this special payout, estimated at about $150 million, and which also includes Kalaari Capital and the company’s founders, is subject to approval from the number of other shareholders in Snapdeal which includes -- Ajim Premji, Ratan Tata, Alibaba group, Foxconn Technology Solutions, Ontario Teachers’ Pension Plan and Temasek, among others.

Flipkart, on other hand, has signed a binding term-sheet to acquire rival Snapdeal and is scheduled to undertake commercial and financial diligence in the next few days.

Flipkart-Snapdeal Merger Now Needs Go-Ahead from Ratan Tata, Azim Premji

A few days back, we reported how finally after 3 months-long deliberations that included more than 15 board meetings and a giant payout of at least $210 million, the Flipkart-Snapdeal merger was finally happening. But, now comes the news that there is still one bump in the road. According to people familiar with the deal, the merger still requires a go-ahead from two of India’s most powerful businessmen magnets, Ratan Tata and Azim Premji.

The merger, which is being deemed as India's biggest consolidation in the e-commerce sector, took a long time to materialise initially mainly because of Snapdeal’s early-stage investor Nexus Venture Partners (NVP) not being happy with the payout being offered by the Tokyo-headquartered telecom and internet giant SoftBank.

The final deal has ended up valuing Snapdeal at around $1 billion, which is a major fall from its $6.5 billion last year, which was the e-commerce firm's peak valuation in its short lived lifespan of seven years. Though the founders, Kunal Bahl and Rohit Bansal and the early-stage investors Kalaari Capital and Nexus Venture Partners have reached a non-binding preliminary agreement wit SoftBank, but that still requires due diligence to be completed in a few weeks.

According to sources close to Snapdeal, the company still has a huge task of getting some of its important investors to agree to sign the papers of the deal. This includes the family offices of Ratan Tata's Tata Group and Azim Premji's Wipro Ltd. It's still not clear if this could act as a major hurdle in the closing of the deal.

According to people familiar with the deal, if the process of duel diligence goes as planned, a term sheet specifying stock and cash for each Snapdeal shareholder will be furnished with the final agreement getting signed by by mid- to late June this year.

According to the terms specified in the preliminary pact, Snapdeal’s two founders Kunal Bahl and Rohit Bansal, who hold approximately 6.5 per cent together in the company, can be expected to get richer by a whopping $60 million when the merger comes through. Though, they might not be given any stake in the merged entity. Nexus has reportedly been given around $80 million for its single-digit stake in Snapdeal, with the exit amount to be provided in a combination of cash and stock in the Flipkart-Snapdeal merged company. Kalaari Capital, on the other hand, is expected to get around $70 million in exit money.

The merged entity is expected to give a major push to the current cut throat competition going on between Jeff Bezos' Amazon and India's very own homegrown e-commerce leader, Flipkart. Reportedly, Bezos' has recently decided to spend a whopping amount of $5 billion in India to gain significant share as the e-commerce market surges in the Indian subcontinent.

According to Masayoshi Son, SoftBank founder, the deal will prove to be a win-win situation for both homegrown e-commerce players. Sources inform that the Son, whose company owns about a third of Snapdeal parent Jasper Infotech Pvt. Ltd. could contribute that equity to the merged entity and infuse another $500 million to $1 billion in Flipkart through a transaction with Flipkart backer Tiger Global Management. The amount will give Flipkart more fuel to battle it out with Amazon.

According to a report in the livemint, not all small investors in Snapdeal are happy with the proposed Flipkart acquisition and some are said to be even dragging their feet. No one knows as of now if this could end up being a deal breaker for the final leg of Flipkart-Snapdeal merger.

Flipkart-Snapdeal Merger Now Needs Go-Ahead from Ratan Tata, Azim Premji

A few days back, we reported how finally after 3 months-long deliberations that included more than 15 board meetings and a giant payout of at least $210 million, the Flipkart-Snapdeal merger was finally happening. But, now comes the news that there is still one bump in the road. According to people familiar with the deal, the merger still requires a go-ahead from two of India’s most powerful businessmen magnets, Ratan Tata and Azim Premji.

The merger, which is being deemed as India's biggest consolidation in the e-commerce sector, took a long time to materialise initially mainly because of Snapdeal’s early-stage investor Nexus Venture Partners (NVP) not being happy with the payout being offered by the Tokyo-headquartered telecom and internet giant SoftBank.

The final deal has ended up valuing Snapdeal at around $1 billion, which is a major fall from its $6.5 billion last year, which was the e-commerce firm's peak valuation in its short lived lifespan of seven years. Though the founders, Kunal Bahl and Rohit Bansal and the early-stage investors Kalaari Capital and Nexus Venture Partners have reached a non-binding preliminary agreement wit SoftBank, but that still requires due diligence to be completed in a few weeks.

According to sources close to Snapdeal, the company still has a huge task of getting some of its important investors to agree to sign the papers of the deal. This includes the family offices of Ratan Tata's Tata Group and Azim Premji's Wipro Ltd. It's still not clear if this could act as a major hurdle in the closing of the deal.

According to people familiar with the deal, if the process of duel diligence goes as planned, a term sheet specifying stock and cash for each Snapdeal shareholder will be furnished with the final agreement getting signed by by mid- to late June this year.

According to the terms specified in the preliminary pact, Snapdeal’s two founders Kunal Bahl and Rohit Bansal, who hold approximately 6.5 per cent together in the company, can be expected to get richer by a whopping $60 million when the merger comes through. Though, they might not be given any stake in the merged entity. Nexus has reportedly been given around $80 million for its single-digit stake in Snapdeal, with the exit amount to be provided in a combination of cash and stock in the Flipkart-Snapdeal merged company. Kalaari Capital, on the other hand, is expected to get around $70 million in exit money.

The merged entity is expected to give a major push to the current cut throat competition going on between Jeff Bezos' Amazon and India's very own homegrown e-commerce leader, Flipkart. Reportedly, Bezos' has recently decided to spend a whopping amount of $5 billion in India to gain significant share as the e-commerce market surges in the Indian subcontinent.

According to Masayoshi Son, SoftBank founder, the deal will prove to be a win-win situation for both homegrown e-commerce players. Sources inform that the Son, whose company owns about a third of Snapdeal parent Jasper Infotech Pvt. Ltd. could contribute that equity to the merged entity and infuse another $500 million to $1 billion in Flipkart through a transaction with Flipkart backer Tiger Global Management. The amount will give Flipkart more fuel to battle it out with Amazon.

According to a report in the livemint, not all small investors in Snapdeal are happy with the proposed Flipkart acquisition and some are said to be even dragging their feet. No one knows as of now if this could end up being a deal breaker for the final leg of Flipkart-Snapdeal merger.

Softbank Cancels Its $1 Billion Investment in Snapdeal

Correction & Apology -- Earlier we had published that Softbank has invested $1 billion on Snapdeal, however its turned out that this news is not correct asthe anonymous source that had reported this news has misinterpreted the proceedings that had happened in this regard. Now it has came to our conclusion that Softababk has infact cancelled or written-off $1 billion of its earlier investment in Snapdeal instead of any fresh investment.

After a lot of speculations, stakeholders' discussions and rumors, Japanese internet giant SoftBank, that holds a significant minority stake in Snapdeal, has finally written-off (cancelled) around $ 1 billion of its invested amount in the company.

Interestingly, it was also speculated that Softbank will invest $1 Billion in Paytm and Snapdeal would merge either With Flipkart or PayTM Mall but the this twist in this news comes at a time when Softbank is in almost of final stages of negotiations to sell Snapdeal to Flipkart. According to sources, a board meeting was held at SoftBank earlier this week to debate on the proposed transaction and come to the plausible consensus of decision, a person who don't want to disclose his name said.

Notably, in the earnings report for the fiscal year ended March 2017, SoftBank said it has written off about $1 billion. This was primarily due to the loss on valuation of shares of subsidiaries and associates including Starfish I Pte Ltd, which holds shares in the privately-held Jasper Infotech, which runs Snapdeal.

When we tried to contact the Softbank official, we haven't got any any response til the time of writing this article.

"The valuation of our financial investments is frequently adjusted upwards or downwards due to accounting policies, currency fluctuations and market dynamics. The loss reported in today's earnings represents the aggregate impact of such revaluations during the course of the entire fiscal year", said a SoftBank spokesperson.

Snapdeal and Ola are Softbank’s flagship investments in India.

Incidentally, Softbank has just marked down its valuation in cab aggregator Ola, run by ANI Technologies Pvt. Ltd. In fact, together in both the startup unicorns, the Japanese investor said, it has incurred a loss of Yen 160,419 million ($ 1.4 billion) from financial instruments at fair value.

This is not the first time when the Japanese investor has reduced the value of some of the startups it has invested in. In February 2017, SoftBank had decreased in value by 39,281 million yen ($350 million) in both Snapdeal and Ola in the nine months ended December 31, 2016.

Softbank Likely To Invest $1 Billion in Paytm; Snapdeal To Merge Either With Flipkart or PayTM Mall

Japan’s telecom and internet conglomerate SoftBank is reportedly in talks with Alibaba-backed Indian e-wallet company PayTM to invest around $1 billion to $1.5 billion. The possible investment comes on the heels of talks with Flipkart for a merger with Snapdeal. Notably, SoftBank is a major stakeholder in Alibaba and Snapdeal both.

Surprisingly, an all-stock merger of Snapdeal with Paytm is being discussed at the highest level, said sources. This could mean SoftBank investing in PayTM, wherein China's Alibaba -- with 40% -- is a maximum stakeholder, and SoftBank in turn is among the oldest investors in Alibaba.

Reliance Capital, who was one of the earliest investors in PayTM, had already sold its stake in One97 Communications -- the parent company of digital payments provider Paytm -- to Alibaba in a deal estimated Rs 275 crore

Apart from Paytm, SoftBank is also in the early stages of considering an investment in online grocer BigBasket provided that Supermarket Grocery Services Pvt. Ltd. -- parent company of Bigbasket-- agrees to a merger with smaller rival Grofers in which the Softbank already has a significant stake.

SoftBank has investments in Snapdeal, while Alibaba has in Snapdeal and Paytm. Also, Softbank Founder & CEO, Masayoshi Son and Alibaba’s founder share a long relationship. In January 2000, SoftBank led a round of $20 million of investment in Alibaba.

According to some sources, SoftBank is making space for Alibaba in the Snapdeal-Flipkart merger -- indicating a three-way merger between Paytm Mall, Flipkart and Snapdeal.

SoftBank, which has been for the last three months trying to strike a deal to sell Snapdeal to Flipkart is in talks with Tiger Global to merge the Gurgaon-based marketplace with Flipkart. However according to sources the plausible deal could go either way -- Snapdeal getting merged either with Flipkart or Paytm.

Experts says that a deal with Paytm makes more sense for Snapdeal as there are synergies between the two ecommerce companies and have Alibaba as a common investor. PayTM, which a valuation of close to $6 billion, has a user base of over 200 million.

SoftBank has already invested $2 billion, and will invest another $8 billion in Indian startups in the next eight years.

Snapdeal Shareholders Held Discussion Over Its Sale To Flipkart

Exactly a week back we reported that Snapdeal is on verge of getting acquired by Flipkart. Today, this plausible acquisition got an update that SoftBank, the largest shareholder in Snapdeal, held boardroom discussions on the proposed sale of the online marketplace to rival Flipkart on Tuesday.

According to the proposed deal, shareholders will get 1 Flipkart share for every 10 Snapdeal shares they own. Besides Softbanks, Ratan Tata, Alibaba and Kalaari are also among shareholders of Snapdeal. Co-founders -- Kunal Bansal and Rohit Bansal -- together own 6.5% of the company shares.

Early investors in Snapdeal - Kalaari Capital and Nexus Venture Partners - which own about 8% and 10% respectively in Snapdeal have also asked for about $100 million each from the sale, the sources said. The proposed sale could see SoftBank, which holds a dominant 33% stake in Snapdeal, to pick up a 20% stake in Flipkart for about $1.5 billion, in the process buying out $500 million to $1 billion worth of Tiger Global's holding in Flipkart,

The deal, if completed, will mark the biggest acquisition in Indian e-commerce and also redefine the outline of online retail market where America's Amazon and China's Alibaba are also prime contenders. Earlier in 2014 when Flipkart acquired of Myntra the deal became the biggest e-commerce acquisition in India.

"A final decision on the sale is yet to be taken," the person said. The board meeting on Tuesday signals easing of tensions among Snapdeal's early investors, Kalaari Capital and Nexus Venture Partners, and its largest backer Softbank, said the report by The Economics Times.

Snapdeal has raised around $1.56 billion in 11 Rounds from 21 Investors while Flipkart has raised around $4.15 billion from around 40 investors.