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eBay Inc burns its fingers, incurs a loss of $61 M from its Snapdeal investment

Sameer Ranjan
7th Feb 2018
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While eBay Inc is one of the early foreign investors in Snapdeal, it started selling the portion of its equity interest in the troubled Snapdeal since 2016.

US-based ecommerce major, eBay incurred a loss of $61 million by writing down its investment in the trouble-torn Jasper Infotech Private Limited, the company that operates the Gurugram-based Snapdeal. The company disclosed its impairment loss from its Snapdeal investment in its annual report filed with the US Securities and Exchange Commission (SEC).

75.-biggest-marketting-loss

The crisis-hit investee company had gone through a lean patch last year and is reported to be restructuring itself post its failed acquisition talks with Flipkart. eBay Inc in its annual report stated, “In 2017, we recorded a $61 million impairment charge to write-down our cost method investment in Jasper Infotech Private Limited. The investment was measured at fair value due to events and circumstances that we identified as having significant impact on its fair value. The fair value measurement of the impaired investment was measured using significant unobservable inputs.”

While eBay Inc is one of the early foreign investors in Snapdeal, it started selling the portion of its equity interest in the troubled Snapdeal since 2016.

eBay Inc is the second such large investor that burnt its finger after Japan-based Softbank incurred loss from its investments in Jasper Infotech. Last year, SoftBank Group said that it had incurred a loss of over Rs 9,000 crore (160.42 billion yen or $1.41 billion) from its investments in the country’s Internet commerce sector. The Masayoshi Son-led telecom and media conglomerate had attributed a large part of the overall loss to its investments done in Snapdeal and Ola.

Despite burning cash from its investment, eBay’s interest in Indian ecommerce market can be gauged from the fact that it made a significant investment of over $500 million in Flipkart along with the selling to it its India business unit.

The regulatory filing also stated that eBay Inc has made a gain of $167 million by selling eBay India business to Flipkart. Currently, eBay Inc has a 5.44 percent ownership interest in India’s e-commerce poster boy, Flipkart. Both Flipkart and eBay are also partnering to leverage opportunities in cross-border trade. The partnership is thus providing a new opportunity for Flipkart sellers to expand its sales globally.

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