Snapdeal eyes Rs 6,200 cr funding boost from Alibaba

Amid stiff competition in the e-commerce space and also under pressure to turn profitable, leading Indian marketplace, Snapdeal is said to be in talks with Alibaba for a record funding boost of Rs 6,200 crores. Even earlier, both had held talks but the deal could not finalise due to over valuation issues.

Jasper Infotech, which owns Snapdeal, is looking for a valuation of around 5 billion dollars (around Rs 30,000 crores) after it raised Rs 3,800 crores from Japan's SoftBank in October last year. At that time the company’s valuation stood at Rs 11,200 crores. Others like eBay, BlackRock, Ratan Tata, PremjiInvest, the personal investment arm of Wipro Technologies Chairman Azim Premji, and hedge funds Myriad Asset Management and Tybourne Capital also hold a stake in Snapdeal.

Rising operational costs are anticipated to increase losses at the company by almost five times, growing to almost Rs 1,500 crores this fiscal. The company is believed to be about 30 percent behind Flipkart and Amazon in terms of GMV (gross merchandise value) and it is trying hard to bridge the difference by adapting discounting and product expansion strategies.