Snapdeal secures 500 million dollars in funding

Jasper Infotech, which owns and operates the leading online marketplace Snapdeal.com, has got a fresh funding of around 500 million dollars (over Rs 3,200 crores), in a new round led by Chinese e-commerce giant Alibaba Group, Taiwanese electronics manufacturer Foxconn, along with existing investor, Japanese internet, media and telecom giant SoftBank, claimed sources.

Online retailers such as Flipkart and Snapdeal will need to collectively raise another 20 billion dollars (Rs 1.27 lakh crore) over the next five years to be able to sustain growth, Goldman Sachs said in a report. Goldman Sachs has also predicted that India will be the second-largest digital market in the world, after China, with the ecommerce market estimated to grow 15 times to 300 billion dollars (by 2030), accounting for 2.5 percent of the GDP by then.

Earlier, funding talks between Snapdeal and Alibaba could not reach a logical conclusion over high valuations sought by Snapdeal. Amid stiff competition and under pressure to turn profitable, Snapdeal was eyeing a record funding boost of Rs 6,200 crores from Alibaba. Even earlier, both had held talks but the deal could not get finalised 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. 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.