Gurugram-based ecommerce platform Snapdeal has raised an undisclosed amount of funding from Anand Piramal. Anand Piramal is the executive director of Piramal Group and founder of Piramal Realty. He has invested in the company in a personal capacity, a company statement said.
Anand Piramal said that Snapdeal’s sharp execution in bringing great selection to the mass market segment in Tier 2-3 cities has been quite successful, leveraging the growing internet penetration in these geographies.
“Since 2017, Snapdeal’s revenues have grown rapidly with profitable unit economics. With hundreds of millions of first time ecommerce buyers yet to transact, Snapdeal is well poised to grow in the future,” Piramal added.
Led by Kunal Bahl and Rohit Bansal, Snapdeal has evolved in a new version of its operations, which founders call Snapdeal 2.0. In 2017, Snapdeal faced a massive downturn after a SoftBank-orchestrated merger with Flipkart failed. From layoffs to losses, the company went through a difficult period.
However, over the last two years the company has scaled its operations to make productive returns. Bahl in a LinkedIn post said that company’s transacting customers grew 2.2X and traffic surged 2.3X to 70 Mn unique users/month.
Kunal Bahl, CEO and cofounder of Snapdeal said, “Anand’s investment comes as a significant endorsement for Snapdeal and the transformation the company has undergone over the last couple of years. 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.”
Snapdeal is now looking to consistently compound revenue growth and create large and valuable enterprises. The company is also looking to temper its growth to address identified parts of the process that are impacting user experience.
Snapdeal’s Return To Form
In 2017, the failed Flipkart merger left Snapdeal in shambles. The company had to let go of much of the staff, change offices, struggle with sellers and at the same time, fight for its survival. After selling all its subsidiaries including Vulcan Express, Unicommerce and Freecharge, Snapdeal got enough capital to reign in its costs and use the money to focus on its ecommerce business. As Snapdeal cofounder Kunal Bahl said in one of his earlier blog posts, “The FreeCharge sale was an important part of Snapdeal 2.0 and without that capital, our survival as a company would have been at risk.”
As a result, Snapdeal is now the only horizontal ecommerce company at scale left in India that is independent and not owned or operated by a large multinational corporation. The company has issued details of its performance for FY19 saying that Snapdeal grew its consolidated revenues by 73% YoY to INR 925.3 Cr in 2018-19 as compared to INR 535.9 in 2017-18.
In the last two years, Snapdeal has added over 60K new seller partners, who have added over 50 Mn new listings. Snapdeal now has more than 500K registered sellers, who have more than 200 Mn listings on the marketplace.
Earlier, founders shared that the company has been cash flow positive in June 2018 which means that the company is now earning money from its business. Over the last two years, the company has controlled its losses by 96% and Bahl attributes this growth to:
- Getting closer to customers
- Deeper collaboration with seller partners
- Aligning technology platform with core objectives
- Putting the fun back in shopping
- Staying lean and moving fast
- Building a culture of belief
The ecommerce environment today is in a state of flux and is currently undergoing a reorganisation to comply with the new FDI rules which came into effect in February. This is coupled with much-awaited entry of Reliance in the ecommerce industry, which is set to be a major disruptor. Snapdeal with its latest investment, is clearly looking to capitalise on the new ecommerce landscape.