Excl: Snapdeal in talks to raise $400M more at $4.5B valuation

Delhi-based Jasper Infotech Pvt Ltd, which runs e-commerce marketplace Snapdeal.com, is in talks with new investors, including international hedge funds, to raise $400 million in a fresh round of funding, a person privy to the development told Techcircle.in.

This round could see the estimated valuation of Snapdeal increase to $4.5 billion, more than doubling since October.

Sources said the rumoured deal between Chinese e-commerce giant Alibaba and Snapdeal is not on. Snapdeal already counts eBay as a strategic investor in the company.

Alibaba already runs its own B2B website in India like some other markets but is a bit player in the fast growing e-commerce industry. Its payments unit Alipay recently picked 25 per cent stake in Noida-headquartered mobile internet firm One97 Communications Ltd.

"It is a market speculation, and as a policy we do not comment on speculation," a Snapdeal spokesperson told Techcircle.in.

Founded in 2010, 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 claims to have 5 million-plus products across more than 500 diverse categories from thousands of regional, national, and international brands and retailers. Snapdeal has now become one of the fastest growing and among the top three online marketplaces in India, with more than 100,000 vendors.

In October last year, Japanese telecom and internet firm SoftBank Corp (which is the single largest shareholder of Alibaba) committed $627 million (Rs 3,846 crore) in Snapdeal. This is the third biggest fundraising round by an Indian e-commerce firm ever, after Flipkart's record $1 billion funding round early in 2014 which was followed by another $700 million round later during the year. That round also included funding from other existing investors.

Prior to that the company had 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 in August.

Prior to attracting investment from 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 state investment firm Temasek, Hong Kong-based Myriad Asset Management and Tybourne Capital Management, besides PremjiInvest, the personal investment vehicle of Wipro chairman Azim Premji.

This funding had come barely three months after the e-commerce player raised $133.77 million (Rs 830 crore) 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, in the third-biggest funding round in an Indian tech firm.

Snapdeal has raised around $1 billion to date, bulk of it in 2014 itself.

It needs the cash to compete with other key e-com marketplaces Flipkart, Amazon and eBay besides ShopClues who are battling it out in India.

(Edited by Joby Puthuparampil Johnson)