Snapdeal in talks with investors to raise $100 million
today Nov 12, 2019
E-commerce marketplace Snapdeal is in talks with new and existing investors including Softbank to raise around $100 million (Rs 716 crore) to consolidate its market position in India.
The latest fundraise comes after a gap of three years. The company had raised capital in February 2016 from investors including the Ontario Teachers Pension Plan, which valued the company at about $6.5 billion.
Since the last fundraise, Snapdeal has struggled to keep pace with e-commerce biggies like Amazon and Flipkart which has resulted in a drop in its valuation to less than $1 billion.
However, Snapdeal has managed to revive its fortunes over the last two years with its new business model and is slowly seeing its valuation increase again.
Snapdeal is working with Bank of America Merrill Lynch as its adviser. The discussions between Snapdeal and various investors are happening at a valuation ranging from $800 million to $1.2 billion, TOI reported citing anonymous sources.
“Snapdeal is not going to compete with Amazon and Flipkart on market share and type of products being sold. They are selling the Bharat story to investors,” a source was quoted as saying by TOI.
Commenting on the possible talks, Snapdeal’s spokesperson said: “While we cannot comment on speculation, Snapdeal is experiencing high-quality growth with industry best economics and all our organisational efforts are devoted to furthering these business objectives.”
Snapdeal had managed to narrow its losses by 71 percent to Rs 186 crore in the financial year 2018-19 as against losses of Rs 611 crore it had reported during the previous fiscal.
The company’s revenue also shot up by 73 percent to Rs 925 crore during the fiscal year 2019.
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