Snapdeal founders and Nexus Venture Partners have reportedly infused $17.5 Mn (INR 113 Cr) into the company in an emergency funding round. The news comes in at a time when Softbank is busy pushing the Flipkart-Snapdeal merger.
As per filings made with the Registrar of Companies, Nexus has added $14.91 Mn (INR 96.26 Cr) while the remaining $2.61 Mn (INR 16.9 Cr) has been poured in by Snapdeal founders – Kunal Bahl and Rohit Bansal. The duo has invested INR 8.45 Cr each.
According to the LiveMint report, Snapdeal was left with a cash reserve to keep the firm going for the next four months. With the fresh funding round, the company can breathe for some more time.
An email sent to both Snapdeal and Nexus Venture Partners did not elicit any response at the time of publication.
Related Article: Ecommerce Firm Snapdeal Asks $900 Mn From Flipkart For Acquisition
Recently, Softbank bought out the stakes of Kalaari Capital and both the Snapdeal founders, raking in a total of 47.5% shareholding in the company. Plus, Kalaari Capital’s representative Vani Kola resigned from the board. Post her resignation, Kalaari Capital does not have any representative on Snapdeal’s Board.
In May 2017, the two companies also signed a Letter of Intent (LoI) for the merger, further solidifying the certainty of the impending deal.
Also, Premji Invest, the investment arm of Azim Premji, has raised concerns to the Snapdeal board touching upon the interests of minority shareholders, post the deal with Flipkart. A nod from Ratan Tata, another minority stakeholder is also awaited.
At present, there is rampant speculation, as industry pundits have been busy calculating the possible deal valuation and its impact on the overall Indian ecommerce ecosystem.
While on one side, the deal seems to have hit a roadblock due to lack of investor consensus, on the other side, frequent media bytes sharing fears of both sellers and employees are on the rise. At the end of April 2017, it seemed that deal would go through in a matter of days, which does not seem to be the case now. With waning investor confidence and this fresh fusion of funds, Snapdeal’s dying star lives on.
Is the infusion of fresh funds by Nexus Venture Partners and the Snapdeal founders an attempt to safeguard the firm from impending the possible consolidation or is it just an attempt to keep going until all the seller and employees issues get sorted? The questions are many and answers are awaited.