Flipkart’s revised bid comes two weeks after its initial offer of US$500-600 million was rejected by Snapdeal
Beleaguered Indian e-commerce marketplace Snapdeal’s bid to find a potential buyer for a decent valuation is taking longer than expected, with a new bidder joining the fray. As per media reports, Ahmedabad-based e-commerce company Infibeam.com has jumped into the fray with a proposal to buy Snapdeal for US$1 billion.
This report comes at a time when bigger rival, Bangalore-based Flipkart, has come up with a revised bid to acquire Snapdeal for US$850 million, two weeks after its initial offer of US$500-600 million was rejected by the Noida-based company, says an Economic Times report citing unnamed sources. Flipkart’s new proposal also includes Snapdeal’s logistics business Vulcan Express and online order management business Unicommerce eSolutions.
As per this report, the revised bid has been formally communicated to Snapdeal’s parent Jasper Infotech board on Monday.
According to another report, Japanese telecom and internet conglomerate SoftBank, the lead investor in Snapdeal, is likely to inject US$500 million in Flipkart as part of the deal. The report by Factordaily also said that with this deal, some of the existing investors at Snapdeal are looking for an exit. In May this year, e27 exclusively reported that SoftBank was likely to inject up to US$1 billion in the combined entity.
Founded in February 2010, Snapdeal was the second biggest e-commerce company after Flipkart until 2015. It was valued US$6.5 billion when it raised funding early last year. The company began to crash after the entry of Amazon, which ate into its market share to become a formidable force in the Indian e-commerce market. Over the past two years, Snapdeal kept losing market share to both Amazon and Flipkart, despite having invested significantly in branding and marketing.
To date, Snapdeal has raised about US$2.18 billion in investment, which included a US$627 million from SoftBank in 2014. Its other investors include Kalaari Capital, Nexus Venture Partners, BlackRock, Temasek, Foxconn, eBay, Premji Invest, Intel Capital, Bessemer Venture Partners, and Ratan Tata. Recently, eBay invested nearly US$500 million in Flipkart and sold its Indian unit to the Bangalore-based company.
Recently, Snapdeal received about US$17.5 million in emergency financing from existing investor Nexus Venture Partners and Co-founders Kunal Bahl and Rohit Bansal.
A few weeks ago, an online seller group sought the intervention of the government of India to stop Snapdeal from proceeding with its merger with Flipkart, until the former settles payment dues of sellers on its platform. However, Snapdeal refuted their claims and said it did not owe money to sellers on its platform.
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