Snapdeal snaps up $500 million round led by Alibaba, Foxconn, and SoftBank
Snapdeal has confirmed a $500 million investment led by Alibaba, Foxconn, and Softbank. Existing investors Temasek, BlackRock, Myriad, and Premji Invest have also participated in this round.
Importantly, this is the second investment of Alibaba in India and in e-commerce. The Chinese e-commerce giant has invested in the Noida-based mobile marketplace and digital wallet startup Paytm. This is also the second biggest round raised by Snapdeal that had earlier raised $627 million from Japanese giant Softbank.
Snapdeal has been in talks with billionaire Jack Ma’s Alibaba for over six months. Prior to this, Snapdeal had raised more than $800 million across three rounds in February, August, and October last year. Ratan Tata is also an investor in Snapdeal. Market leader Flipkart has raised over $2.5 billion so far in risk capital funding.
Speaking about this transaction, Kunal Bahl, Co-Founder and CEO of Snapdeal, said,
We see this milestone as a significant endorsement of Snapdeal’s strategy and commitment to creating life changing experiences for millions of small businesses and consumers in India. With global leaders like Alibaba, Foxconn, and SoftBank, in addition to our other existing partners, supporting us, our efforts towards building India’s most impactful digital commerce ecosystem will be propelled further, enabling us to contribute towards creating a Digital India.
Last month, the Softbank-backed venture had launched a mobile-only marketplace Shopo to sell fresh as well as used goods. Besides this, it also launched a similar image search platform FindMyStyle.in. Snapdeal has an assortment of over 15 million products across over 500 diverse categories sold by over 1.5 lakh merchants.
There has been a lot of buzz in the media about Snapdeal raising money from Alibaba and Foxconn. Snapdeal's knack in recent months to attract big-ticket investors and large sums of capital has made it a strong contender to beat current market leader and the much better funded Flipkart. Amazon, which had committed $2 billion to its India operations last year, was also so far focused on Flipkart.
It will now have to contend with the new Snapdeal that is backed by investors with some very deep pockets. Importantly, with this investment, Alibaba has become a serious stakeholder in the Indian e-commerce and startup ecosystem.
Also with Snapdeal as a partner, Foxconn will reduce the dependence on conventional supply chain and shrink the gap between products and consumers. Also, it will help Foxconn to establish strong footholds in India which is eyeing to set up manufacturing units in a few states in the country. However, the industry will keenly watch how Alibaba's investment in Snapdeal will affect Paytm. It will also be interesting to watch the strategies of the top players as they battle it out for the Indian e-commerce crown.
(With inputs from Radhika P Nair)