Snapdeal, on Tuesday, said it had raised $500 million (about Rs.3,269 crore) in a new round of funding that was le by Chinese firm Alibaba Group, Taiwan’s Foxconn and Japan’s SoftBank.
The move is a vote of confidence from three of the world’s biggest technology companies in Snapdeal, which in October got a $627 million investment from SoftBank, also an early backer of Alibaba
Snapdeal, which bills itself as India’s version of Alibaba did not break out individual investments. Ebay Inc (EBAY.O) an early backer of the company, is selling part of its stake in a transaction which also involves fresh funding.
Existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in the funding round, Snapdeal said, without giving further details.
Snapdeal had raised more than $1 billion, from investors including Softbank ($627 million) and iconic business leader Ratan Tata (personal investment)
EBay said in a statement it has sold a portion of its stake and would focus on boosting its own business in the country.
Foxconn said separately that it contributed $200 million of the total investment, which gives it a 4.27% stake in Snapdeal. The investment comes from subsidiary FIH mobile Ltd., a fast growing assembler of Xiaom Corp. and Huawei Technologies Co.
According to media reports, the investment values Snapdeal at $4.5-5 billion. The investment has been in the works for long and was stuck due to differences in valuation, a report in the Economic Times said.
Indian e-commerce companies have been on a fundraising spree during the past two years. Mobile-payment and e-commerce company Paytm raised $575 million from Zhejiang Ant Small & Micro Financial Services Group, Alibaba’s financial-services affiliate, in January. Market leader Flipkart Internet Pvt. raised $550 million in April.
These companies are building their cash reserves as they seek to expand the number of people selling on their websites and try to bolster their presence in India’s smaller cities and towns.
Snapdeal recently announced a stream of new businesses, including a mobile app for Indian handicrafts called Shop. It also expanded into financial services, offering loans to consumers to buy products and merchants to help expand their businesses.