Snapdeal to raise $627 million funding from the Softbank group, enters the $1 billion funding club
Financial service arm of Japanese telecommunication and internet corporation, SoftBank Internet and Media, Inc. (“SIMI”) along with Snapdeal today announced definitive agreements under which the SoftBank Group (further described below) will invest $627 million and hence become the largest investor in the ecommerce firm.
Through this strategic investment and partnership with Snapdeal, the SoftBank Group aims to further strengthen its presence in India and leverage synergies with its network of Internet companies around the world. Snapdeal was founded in 2010 and has more than 25 million registered users and more than 50,000 business sellers as of now. Earlier, the company has raised $100 million in May 2014 and an undisclosed amount from Ratan Tata in August this year. With the current round, total funding raised has crossed the $1 billion mark.
Masayoshi Son, Chairman and CEO of SoftBank Corp. said,
We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade. As part of this belief, we intend to deploy significant capital in India over the next few years to support development of the market.
Softbank group has also announced an investment of $210 million in Olacabs. Both the investments comes prior to Masayoshi's visit to India. Nikesh Arora, Vice Chairman of SoftBank Corp. and CEO of SIMI, will be joining the board of Snapdeal as part of this strategic investment by the SoftBank Group. He shared on twitter:
India has the third-largest Internet user base in the world, but a relatively small online market currently. This situation means India has, with better, faster and cheaper Internet access, a big growth potential. With today’s announcement SoftBank is contributing to the development of the infrastructure for the digital future of India. We want to support the leaders and entrepreneurs of the digital future; Kunal and Rohit are two such great leaders.
Snapdeal has an assortment of 5 million+ products across 500+ diverse categories from various regional, national, and international brands and retailers. The ecommerce giant boasts of more than 25 million members and 50,000+ merchants, on its platform and delivers to 5000+ cities and towns in India. The company witnessed 600% growth from 2013 to 2014, with over 60% of its orders coming from mobile phones.
Kunal Bahl, Co-founder and CEO of Snapdeal said,
Our entire team at Snapdeal is thrilled and honoured to have SoftBank as a strategic partner. With the support of Son-san and Nikesh, we are confident we will further strengthen our promise to consumers and create life changing experiences for 1 million small businesses in India.
Morrison & Foerster LLP acted as legal advisor to SoftBank, with Kochhar & Co. advising SoftBank on India law matters.