While the Flipkart and Snapdeal deal is expected to be signed in the next couple of days, good news abounds for the employees of the Delhi-based ecommerce marketplace. As per recent reports, Snapdeal may offer a $30 Mn (INR 193 Cr) bonanza to its staff, if the deal with Flipkart goes through.
About 1,500-2,000 Snapdeal employees and Snapdeal founders will give half of their total payout i.e. $30 Mn for the proposed scheme which would cover the current employees of the company. “The founders have asked the Board to carve out $30 Mn (about Rs 193 crore) from their settlement for payouts to the Snapdeal team. They want to ensure that the team does not get sidelined in any manner,” sources told PTI.
The decision has been taken as a way to compensate for the ESOPs that Snapdeal has issued to its senior employees which will be worthless after the deal is signed. The report further stated that the deal-linked payment would also be extended to employees who do not own ESOPs to reward those staying on with Snapdeal till the proposed transaction is being done. The employees who have left Snapdeal in the last 12 months could also benefit from the process.
In February 2016, Snapdeal had fired around 600 employees with the founders announcing their intent of taking a 100% pay cut. Earlier this month it was reported that the company has started initiating payouts to the employees it laid off two months back. The company had also vacated its 90-seat office at a coworking hub in Mumbai last month and was in the process of vacating its offices in Gurugram.
Vani Kola Resigns From Snapdeal Board
In another development, Kalaari Capital’s representative on the Snapdeal Board, i.e. Vani Kola, has resigned from the board of Jasper Infotech (the parent company of Snapdeal), as per regulatory filings with the Ministry of Corporate Affairs.
Vani was on the board of Snapdeal since September 2009 and resigned on May 2, 2017 from the post of Director. In a letter, Vani requested to be discharged of her duties with “immediate effect.” She wrote, “I thank the Board not only for giving me the opportunity and assistance to discharge my duties during my tenure as a Director of the company but also for the invaluable learnings, which I gained from my interactions with my fellow Board members.”
With her exit, there is no representative from Kalaari on Snapdeal’s board. Other members of its Board include – Snapdeal founders Kunal Bahl and Rohit Bansal, Suvir Sujan of Nexus, Kabir Misra and Lydia Bly Jett of SoftBank Capital.
Till date, SoftBank has invested about $900 Mn and has a 30% stake in Snapdeal. Kalaari and Nexus hold 8% and 10% stakes, respectively. As per reports, Nexus Venture Partners is speculated to receive around $80-100 Mn, Kalaari Capital is expected to get around $70 Mn-$80 Mn, while the Snapdeal founders will get $30 Mn each post their exit from the company.
Snapdeal was valued at around $6.5 Bn during its $200 Mn last year. Last week, the company agreed to sign a non-binding Letter of Intent (LoI) for the merger with Flipkart which will value Snapdeal at about $1 Bn. The deal is expected to get signed in the next five-seven days.
Just last week, investor SoftBank wrote off nearly $1.4 Bn in the combined Ola and Snapdeal valuation, for the quarter ending March 2017.