Snapdeal Raises $200M At a Approx Valuation of $6.5-7B, Now the 2nd Highest Valued Startup in India

Jasper Infotech, which owns Snapdeal has successfully raised $200 million (Rs 1360 crore) from Ontario Teachers’ Pension Plan, Brother Fortune Apparel & Bennett Coleman & Co (publishers of Times of India) which has enabled their valuation to $6.5-7 billion. This makes Snapdeal India’s 2^nd most valued startup after Flipkart.

Ontario Teachers’ Pension Plan is world’s one of the largest independent venture capital firms having combined assets of $15.4 billion, and backed by Government of Ontario. Brother Fortune Apparel is Singapore based investment firm, having deep rooted interest in apparel and textile market globally.

Last August, Snapdeal had raised $500 million from Alibaba, Foxconn and SoftBank, which had swelled their valuation to $5 billion. Hence, within a span of 6 months, Snapdeal has increased their valuation by 40%.

Snapdeal responded, as Anup Vikal, chief financial officer at Jasper Infotech said, “We see these investments as a continuing endorsement of Snapdeal’s strategy to build India’s most reliable and frictionless commerce ecosystem,”

As per available report, Snapdeal aims to strengthen their ‘internal and external capabilities’ by using the fresh funding.

Details of Investment

As per records available with Registrar of Companies, Brother Foundation has invested Rs 335 crore, as Jasper Infotech issued 20,205 Series J compulsorily convertible cumulative participating preference shares, which are priced at Rs 1,65,929.15.

Compared to last funding, this new round of VC capital has been infused at a premium of 32%. On the other hand, Bennett Coleman has been issued 15,638 warrants estimated at Rs 25.49 crore.

Flipkart & Paytm Also Raising Funds?

As per exclusive report from ET, Flipkart is in talks to raise around $1.4 billion, which will shoot up their valuation to $18 billion, from $15 billion right now.

And, the same report mentions that Paytm may raise $400 million in the latter half of 2016.

The investment game has received a new push within Indian ecommerce niche, as Amazon has already infused fresh $300 million to tap more sellers into their eco-system.

Snapdeal Controversies

Recently, Aamir Khan was removed as their brand ambassador, after his ‘intolerance’ remark sparked outrage all over the country.

Last week, an employee from Snapdeal was allegedly abducted, who was later found in Panipat. Police are already investigating the case.

Besides the controversies, Snapdeal has been silently working towards achieving greater traction and visibility by opting the right strategy. Recently we came to know that Snapdeal has achieved revenues of Rs 938 crore during 2014-15, with a net loss of Rs 1319 crore. Rs 766 crore has been the revenue from operations; which is an year on year growth of 450%.

Considering that the issue of market place model in India is still not clear, and DIPP has failed to recognize this as a viable business model, doubt persists over the future of Indian ecommerce.

But, investors have shown the right kind of interest as of now, and we hope that the momentum is maintained.