Snapdeal Expected To Raise $200 Million; Valuation Can Go Upto $750 Million
Snapdeal, one of the hottest success stories of Indian eCommerce industry is all set to receive $200 million in a fresh round of investment, as per a recent report.
In the month of June, 2013, Ebay had created ripples across this sector when it led a $50 million investment in Snapdeal and became the largest investor in the company with 10% stake and a strategic partnership. At that time, Snapdeal was valued around $200 million. But if the current funding of $150 to $200 million goes through, then it will increase the valuation of the company to $750 million.
This fresh round of funding is expected to be led by Japan’s Internet company Softbank and a group of private investors. As of now, besides eBay, the existing investors in Snapdeal include Bessemer Venture Partners, Nexus Ventures, Intel Capital, Russian venture fund ru-Net and Saama Capital.
Snapdeal currently has annual revenue of Rs 2500 crore, and it requires fresh capital to increase its technological efficiency and delivery mechanism. It is no secret that Flipkart is their biggest competitor as of now, which has increased the momentum of the market by announcing a fresh round of investment to the tune of $360 million with a goal of surpassing $1 billion sale by 2015. Additionally, Amazon’s aggressive growth in India is also something that Snapdeal will be wary of!
In the last few weeks, there has been some close door meetings going on between eBay senior management and Snapdeal team regarding undisclosed issues. It seems that eBay is closely monitoring the funding activities of Flipkart and other eCommerce players, and doesn’t wish to be left behind in the VC race. eBay is sitting on a cash reserve of $10 billion, and has some aggressive plans related to online market place model inside India.
Snapdeal, which started as a daily deal website in the year 2010 by Kunal Bahl and Rohit Bansal, has changed its business model and by 2013, it has become a pure play eCommerce portal, selling over 25,000 products daily. Since eBay started showing interest in Snapdeal, it has now converted into an online marketplace wherein sellers from all over India can use the platform to market their products.
The success of this model is debatable, though.
Having 20 million subscriber base, and presence in 4000+ cities and towns across India, Snapdeal is surely among fastest growing Indian ecommerce player. And it has done some amazing social work as well, which had led to a village being renamed as Snapdeal.com Nagar.
The list of funding which Snapdeal received till now: (source: Wikipedia)
Round 1: In January 2011, Snapdeal received a funding of $12 million from Nexus Venture Partners and Indo-US Venture Partners.
Round 2: In July 2011, the company raised a further $45 million from Bessemer Venture Partners, along with existing investors Nexus Venture Partners and Indo-US Venture Partners.
Round 3: Snapdeal then raised a 3rd round of funding worth $50 million from eBay and received participation from existing investors – i.e. Bessemer Venture Partners, Nexus Venture and IndoUS Venture Partners. With this round, Snapdeal has raised a total of $102 million of funding.
Round 4: [In process]