Once again Snapdeal has started gaining media attention. Currently in the phase of building Snapdeal 2.0, as expected there is nothing positive so far for the Gurugram-based ecommerce firm. After the recent news of its CFO Anup Vikal leaving the firm and GoJavas sueing it for $45.8 Mn, now the company is said to be looking for a buyer to sell off its logistics arm Vulcan Express.
As per reports, Snapdeal might sell off Vulcan Express to AllCargo, a Mumbai-based global transportation logistics solutions provider in over 160 countries. The firm is listed on BSE and the deal can be possibly done for $4.6 Mn (INR 30 Cr).
“The term sheet hasn’t been signed yet and the company is evaluating a draft,” said a source closely associated with the development adding that what remains to be decided is whether it will be an all-cash deal or not. Also, AllCargo has termed the development as ‘market speculation’ in response to a media query by Money Control.
Related Article: Future Group In Final Stages To Acquire Vulcan Express For $7.8 Mn
Vulcan Express was founded in 2013 as an end-to-end logistics and supply-chain solution for managing Snapdeal’s shipments. This came at a time when Snapdeal had discontinued its contract with third-party ecommerce logistics player GoJavas.
Currently, the company’s services include transportation, warehouse management, line haul, last-minute distribution, quality control, inventory tracking as well as reverse logistics. Over the years, it has reportedly acquired more than 1 Mn square feet of warehouse space, which is currently used to handle over 250K daily deliveries.
In 2015, Vulcan received $3.75 Mn (INR 25 Cr) from its parent entity Jasper. Also, Vulcan Express raised $23.8 Mn in September 2017 and $5.68 Mn (INR 36.5 Cr) in July 2017 from Jasper Infotech.
Earlier this year, Snapdeal sold off its digital payment subsidiary FreeCharge to Axis Bank for $60 Mn. The decision came in after the long-awaited Flipkart-Snapdeal merger deal fell through, as the latter decided to go solo on the path of creating a TaoBao like model with Snapdeal 2.0.
While a lot has been said by the Snapdeal founders and media to date, there has not been disclosed much about the new version yet. At a time when the ecommerce players like Flipkart and Amazon India are busy strengthening their digital payment and logistics subsidiaries, Snapdeal is getting rid of them. The money garnered after the sale of Vulcan Express may give Snapdeal a financial support for some more time. However, with all gone, and just with its ecommerce model, will Snapdeal be ever able to regain its old position amidst the market leaders in the near future, is difficult to say.