Alibaba, Foxconn, SoftBank invest $500 million in Snapdeal

Snapdeal released a statement mentioning that present investors like Singapore-based Temasek, PE fund BlackRock, Myriad and Premji Invest also participated in the latest round of funding.

The investment round was led by Chinese e-commerce company Alibaba, Taiwanese contract manufacturer Hon Hai Precision Industry Co., known by the trade name Foxconn, and existing investor SoftBank. Snapdeal had earlier in October got a $627 million from SoftBank.

But with a stake purchase in Snapdeal, eBay hinted towards a renewed focus on the Indian market, not with its own brand name, but by backing, in what now has become, India’s second larget e-commerce brand.

“That is why, with a significant share of e-commerce transactions in India being done via mobile devices, the investment positions FIH to benefit from Snapdeal’s platform”, Foxconn said in a statement.

This recent round of funding values the company at about $4-5 billion dollars as per market estimates.

Founded in 2010 by Wharton alumni Kunal Bahl and IIT-Delhi graduate Rohit Bansal, Snapdeal is India’s largest online marketplace in terms of sellers transacting on its platform.

According to official documents filed with the registrar of companies, Snapdeal’s valuation had increased to roughly Rs.28,000 crore (about $4.67 billion then), after it acquired FreeCharge in a cash-and-stock deal.

Recently, Foxconn founder Terry Gou said that India is a key market this year for his group. Financial details of the deal were not revealed.

After leading a $134m Snapdeal funding round two years ago, eBay has sold a partial stake in the company looking to pump the revenue from the sale into other areas of the business.

“Going forward we will focus on accelerating eBay’s presence in India, and empowering customers through technology, as with our new #SheMeansBusiness program that encourages female entrepreneurs with online businesses to share their success stories and help other like-minded businesswomen”, Schenkel wrote.

Snapdeal will use the money to expand geographical reach and enhance the depth of its services in a bid to better compete with well-funded rivals such as US-headquartered Amazon and Bangalore-based Flipkart.