Snapdeal raises over Rs 113 cr from NVP, founders
- Author: Zachary Reyes May 30, 2017,
May 30, 2017, 21:18
Online retailer Snapdeal, which is likely to be merged with Flipkart, on Monday said that it has received a fund infusion of Rs 113.3 crore (about $17 million) from existing investor Nexus Venture Partners and co-founders Kunal Bahl and Rohit Bansal.
Additionally, both, Bahl and Bansal were each allotted 1,300 Series J1 preference shares, which have a cumulative value of Rs 16.90 crore.
It is not clear how long the fresh financing round will help Snapdeal in continuing operations as it faces intense competition from rivals Flipkart and Amazon.
This infusion of funds comes at a time when the final contours of Snapdeal's sale to Flipkart is being finalized after the boardroom battled it out to reach a consensus over the deal.
The cash-strapped firm, over the past few months, has trimmed workforce and shut down non-core operations in a bid to control costs.
The development comes at a time when rival Flipkart, also India's largest e-commerce company, is now undertaking its due diligence, prior to its anticipated takeover of Snapdeal, in a deal that could value the latter at between $700 million-$1 billion, and which is being orchestrated by its largest stakeholder, Japan's SoftBank.
While Nexus is one of the early investors in Snapdeal, the company's largest investor, Japan's telecom and internet giant Softbank is leading the talks with Flipkart for a proposed sale of the beleaguered ecommerce company. Snapdeal was valued at about $6.5 billion earlier this year in February.
Compared to a valuation of about United States dollars 6.5 billion in February 2016, the sale to Flipkart could see Snapdeal being valued at about USD 1 billion.
The details of previous transaction could not be ascertained as Snapdeal, unlike its other acquisitions, had never officially announced this particular deal.
This is published unedited from the PTI feed.