Snapdeal eyes $200 million fresh funding

eBay, Japanese internet major SoftBank and a clutch of private equity investors are looking to pump in $150-200 million of fresh funds into domestic online marketplace Snapdeal. The San Jose, CA-based eBay, which pioneered auction-styled online shopping, had picked up an under 10% stake in Snapdeal earlier this year and is now keen on increasing that stake in the company. 

SoftBank, on the other hand, has also been negotiating a deal to top up the $50 million Snapdeal raised from eBay and existing investors Bessemer Venture Partners and Nexus Ventures earlier this year. Other investors in the company include Intel Capital, Russian venture fund ru-Net and Saama Capital. Industry sources told TOI that eBay's last round of funding had valued Snapdeal at about $200 million but a deal for a larger stake now could see its valuation go up to $750 million. 

Founded by Wharton alumnus Kunal Bahl and IIT-Delhi graduate Rohit Bansal in 2010, Snapdeal moved from being a daily deals site modelled on the likes of GroupOn to an online marketplace a year back. Jasper Infotech owns and operates the online marketplace Snapdeal.com. 

One of the more successful e-commerce ventures in India at present with around Rs 2,500 crore in annual revenue, Snapdeal requires to raise more cash to keep growth intact even as its main rival Flipkart steps up the momentum having raised $360 million recently. The online marketplace aims to clock a billion dollars in annual gross merchandise volume by 2015. 

When contacted by TOI, Snapdeal's Bahl declined to comment on the fund-raise while an eBay India spokesperson said the company does not comment on speculation. 

In recent weeks, eBay's senior global executives, led by Ian Bednowitz, director, marketplaces, corporate development, have held talks with Snapdeal, signalling their interest to acquire more shares in the Indian company. eBay has placed big bets on the marketplace model to corner a big chunk of the e-commerce action in the emerging markets, which it said would bring 12% sales within two years. 

eBay, which wants a bigger slice of the digital commerce pie in emerging markets, is discussing a potential deal to buy controlling stake in Snapdeal, said a source mentioned in the report earlier. 

eBay, sitting on more than $10 billion in cash, may be watching the moves of South African internet behemoth Naspers and Amazon which have aggressive plans to expand their India footprint. 

Naspers is the second largest shareholder in Flipkart and recently acquired online bus ticketing firm redBus, besides running a joint venture with China's Tencent - the Ibibo Group. Amazon, on its part, has rolled out its own online marketplace and is awaiting FDI in e-commerce to unfurl a bigger play through acquisitions. India's e-commerce market - which is expected to touch $8.8 billion by 2016, according to Forrester - is still an open play unlike China where a slew of local giants like Alibaba largely dominate the local market.