Snapdeal set to raise a large round from an Asian investor

One of India's largest e-commerce companies, Jasper Infotech Pvt Ltd, which runs the online marketplace Snapdeal.com, is close to raising a significantly large round of funding from one or two Asian investors, at least two sources with the knowledge of the matter told VCCircle. "This will be one of the most significant transactions which will put the company on a global map," said one of the sources.

Another source added that Japan's top internet and telecommunications company Softbank is in talks with Snapdeal. An email sent to Kunal Bahl, founder and CEO of Snapdeal, to know more details of the development did not elicit any response till the time of writing this article.

While the investment amount is not known, there is a strong buzz that the funding would be as large as $500 million. The Delhi-headquartered e-commerce company, which already has a significant backing from eBay, is looking at a public float in the next 18-24 months.

Softbank has in the past invested $200 million in mobile advertising firm InMobi.

Most recently, Snapdeal created headlines when it raised an undisclosed amount of funding from Ratan Tata, former chief of Tata Group and currently chairman emeritus of group's holding company Tata Sons. This was the first publicly known personal investment of Tata, who has invested in his personal capacity.

Prior to Tata, in May, Snapdeal had raised $100 million (Rs 590 crore) from a group of new investors including US-based BlackRock Financial Management, Singapore's sovereign wealth fund Temasek, Hong Kong-based Myriad Asset Management and Tybourne Capital Management, besides PremjiInvest, the personal investment vehicle of Wipro chairman Azim Premji.

This funding came barely three months after the e-commerce player raised $133.77 million (Rs 830 crore) in a round led by existing investor eBay Inc with participation from other existing investors Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital.

As first reported by Techcircle.in, the company had asked its financial advisor Credit Suisse to scout for $300 million from private investors.

Snapdeal was started as an online deals site, which later pivoted to a full-fledged horizontal e-commerce company with a marketplace model in September 2011. It offers over five million products across more than 500 categories. The company claims to have over 25 million members and 50,000 sellers, and is delivering to 5,000+ cities and towns in India. It further claims to have witnessed 600 per cent growth year-on-year for the last two years. The current team size is 1,500 employees.

The company recently launched a new initiative to help sellers on its platform get easy access to working capital to help them expand their business further.

The $3 billion Indian e-commerce market is witnessing aggressive competition from global giants as well as home-grown players. Led by increasing internet penetration and youngsters shopping online, India's e-commerce market has seen huge growth in the past few years.

Last month, e-commerce giant Amazon said it will invest $2 billion in the country to grow the business in a market that is dominated by home grown players like Flipkart and Snapdeal.

The US-based firm's announcement came less than 24 hours after rival Flipkart announced raising a whopping $1 billion funding, the largest in the e-commerce space in India and also one of the single biggest funding rounds for a tech venture globally.