Snapdeal set to raise $500 mn from SoftBank, Alibaba and Foxconn

Online marketplace Snapdeal plans to raise another $500 million from overseas investors, including Japan's SoftBank, an existing investor, global retailer Alibaba Group and Taiwanese contract manufacturing firm Foxcon, reports quoting sources familiar with the matter said.

Online tech publication Re/code first reported the investment on Sunday citing multiple sources, saying the deal had already concluded.

Snapdeal had previously raised more than $1 billion from a clutch of investors, including SoftBank, eBay, BlackRock, Bessemer Ventures and Indian venture capital firms such as Kalaari Capital and Nexus Venture Partners.

Snapdeal, which connects small businesses with customers in an online marketplace, had secured a $627-million investment from Japan's SoftBank, which had earlier funded Alibaba as well.

The move is aimed at boosting the company's valuations and spending capacity as it competes with rivals Flipkart Online Services Pvt Ltd and the local subsidiary of Amazon.com Inc in the country's online shopping market, which Morgan Stanley estimates will be worth $102 billion by 2020.

The deal represents Alibababa's first direct investment in the India.

Alibaba was in direct funding talks with Snapdeal in March, but opted to instead invest together with SoftBank and Foxconn, reports pointed out.

Alibaba affiliate Ant Financial Services Group had, in February, agreed to buy 25 per cent of Indian payment services provider One97 Communications.

The fund-raising spree by major e-commerce firms in India points to the head-on competition that the Indian e-commerce sector is set for.