Excl: Now Taiwan's Foxconn in race to invest up to $700M in Snapdeal

Delhi-based Jasper Infotech Pvt Ltd, which runs e-commerce marketplace Snapdeal.com, has attracted interest from Taiwan-based Foxconn Technology Group, one of the world's largest contract electronics manufacturing firms, to raise as much as $600-700 million in a fresh round of funding, at least two sources familiar with the matter told Techcircle.in.

However, the talks are still at a preliminary stage and the company is yet to issue a term sheet.

"Foxconn is world's biggest contract electronics manufacturer. But they are now finding new growth drivers as revenue from the contract manufacturing business is slowing down. India being a huge retail market, this is a great opportunity for them," said one of the persons mentioned above.

An email sent to Foxconn's spokesperson did not elicit any response till the time of publishing this report, while a Snapdeal spokesperson said, "It is a market speculation, and as a policy we do not comment on speculation."

Foxconn, officially known as Hon Hai Precision Industry Co Ltd, is the world's largest contract electronics manufacturer, and its clients include major American, European, and Japanese electronics & IT companies like Acer, Amazon, BlackBerry, Cisco, Dell, HP, Microsoft, Motorola Mobility, Nokia, Sony, Xiaomi and Nintendo, among others.

The company also assembles the bulk of Apple's iPhones and iPads and has factories in Asia, Europe, Mexico and Brazil.

Besides planning an India e-commerce foray through Snapdeal, Foxconn is planning to enter the e-commerce space in China. According to The Wall Street Journal report, it has launched a trial site, 'flnet.com', for an online marketplace to sell electronics. The company is taking the e-commerce route after a failed attempt to make inroads into the retail market in the country.

Foxconn's interest in Snapdeal comes amidst media reports stating that the latter is in talks with the world's largest e-com firm Alibaba for a potential investment. The report further mentions that the negotiations are going on. "Alibaba was looking, but there's still no deal," claimed a source.

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.

Earlier this month, Techcircle.in had exclusively reported that Snapdeal.com is in talks with new investors, including international hedge funds, to raise $400 million in a fresh round of funding. This round could see the estimated valuation of Snapdeal increase to $4.5 billion, more than doubling since October last year.

Snapdeal already counts eBay as a strategic investor in the company.

Founded in 2010, Snapdeal 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 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.

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

(Edited by Joby Puthuparampil Johnson)