Indian ecommerce major Snapdeal is going from strength to strength after a couple of years of heavy losses in 2017 and 2018. After achieving a record number of orders last month, Snapdeal is reportedly in talks to raise around $100 Mn funding from its existing investors including SoftBank, along with new investors.
According to an ET report, SoftBank is committing around half of the amount that Snapdeal is planning to raise with this round. Notably, SoftBank is an existing investor in Snapdeal and it has also invested in other Indian unicorns Ola, OYO, Paytm and others.
Currently, Snapdeal is said to have on-boarded Bank of America Merrill Lynch as its investment adviser and is in talks with other Indian and international investors to join the round.
Inc42 reached out to Snapdeal for a confirmation about the funding round, but the company did not respond to our queries till the time of publication.
Related Article: SoftBank May Fuel Up Flipkart With Massive $2 Bn Funding
The funding round is speculated to value Snapdeal between $800 Mn and $1.2 Bn. After significant value erosion over 2017 and 2018, this would not only help win back the trust of existing investors but would definitely ramp up competition for Amazon, Flipkart.
While the source told ET that Snapdeal is not looking to compete with Amazon and Flipkart for market share and inventory range, it’s looking to target Tier 3 and lower markets, which has also the focus of Amazon and Flipkart in the past year.
Snapdeal’s Comeback Run
It’s been a good year for Snapdeal as the Gurugram-based company raised an undisclosed amount of funding from the executive director of Piramal Group, Anand Piramal, in July.
Founded and led by Kunal Bahl and Rohit Bansal, Snapdeal is reported to have grown its consolidated revenues by 73% year-over-year (YoY) to INR 925.3 Cr in 2018-19 as compared to INR 535.9 in 2017-18.
At the same time, Snapdeal also managed to reduce its loss by 71% to INR 186 Cr in FY19 from INR 611 Cr reported in FY18. Revenue from operations for Snapdeal (standalone) grew by 87% YoY from INR 436.1 Cr in FY18 to INR 813.8 Cr in FY19.
In the Indian ecommerce space, things are moving rapidly. Recently, Singapore-based Qoo10 Pte Ltd acquired ecommerce company ShopClues in a stock deal. Once valued at over $1.1 Bn, the ecommerce company was acquired by Singapore’s firm for less than $100 Mn a few weeks ago. Interestingly, Snapdeal was in talks to buy Shopclues earlier in the year, but the deal fell through.