Snapdeal raises $500 mn in fresh funding, takes valuation to nearly $5 bn
19 Aug 2015
Online marketplace Snapdeal has raised $500 million (about Rs3,269 crore) in a fresh round of funding from a clutch of investors, including Japan's SoftBank, e-commerce giant Alibaba Group and Taiwan-based Foxconn Technology.
Existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in the latest funding round, Snapdeal said in a statement.
The company had raised over $1 billion from investors, including Softbank ($627 million) and Tata Group chirman emeritus Ratan Tata.
The new funding round will take the value of the Indian e-commerce major to about $4.68 billion.
"We see this milestone as a significant endorsement of Snapdeal's strategy and commitment to create life changing experiences for millions of small businesses and consumers in India," Snapdeal co-founder and CEO Kunal Bahl said.
Jasper Infotech Pvt, which owns Snapdeal, did not specify the individual investments being made. However, FIH Mobile Ltd, a unit of Foxconn, said it is picking up 4.27 per cent stake in the company for $200 million.
The Foxconn arm bought 2,967 compulsorily convertible cumulative preference shares from eBay for $50 million in cash and subscribed to 79,113 such shares of Jasper for $150 million.
Foxconn invested the maximum amount of $200 million in the latest funding round, although existing investors Temasek Holdings Pte, BlackRock Inc, Myriad and Premji Invest also participated in the funding.
While eBay sold a partial stake in Snapdeal to profit from the a rising stock, the US company said it would retain "a significant portion" of its original investment in the Indian e-tailer.
Ebay said the valuation of Snapdeal has significantly increased over the past two years and the sale will enable it to earn a strong return on its invested capital and strategically redeploy it into other areas of business.
"We will retain a significant portion of our original investment in Snapdeal. In addition, India remains an important market for eBay, and going forward, we will focus on accelerating eBay's own web and mobile presence there," eBay said.
With global leaders like Alibaba, Foxconn and SoftBank supporting the company, Snapdeal said its efforts towards building India's most impactful digital commerce ecosystem will be propelled further, enabling it to contribute towards creating a Digital India.