SoftBank buys $627 million stake in Snapdeal

Snapdeal today said it raised $627 million in a round of investment led by Softbank, making the Japanese telecom and media group the largest investor in the Indian online retailer.

The companies did not divulge Sotbank’s holding in India’s third biggest online marketplace, post the deal.

With the latest round of funding, Snapdeal has raised close to $950 million this year alone, in three different rounds. The company plans to use this investment to enhance its technology, improve supply chain management and increase its workforce to 1000 people by the year-end. The money will also be used to make new acquisitions and double its chain of fulfillment stores which, will span  30 cities, the company said.

The Japanese giant, which has closed a slew of high profile deals this month, including acquiring a minority stake in Hollywood studio Legendary Studio for $250 million, also announced yet another investment in an India startup. Softbank will be picking up equity interest in India’s Olacabs for $210 million.

“We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade. As part of this belief, we intend to deploy significant capital in India over the next few years to support development of the market,” Masayoshi Son, chairman and chief executive of SoftBank Corp, said in a statement.

“India has the third-largest Internet user base in the world, but a relatively small online market currently. This situation means India has, with better, faster and cheaper Internet access, a big growth potential,” SoftBank Corp Vice Chairman and CEO of SIMI Nikesh Arora said. SIMI is the investment arm of SoftBank Corp.

This round of funding  sets the value of Snapdeal at around $2 billion. This is double the valuation from when Snapdeal last raised funding five months ago. The online retailer had raised $100 million in May this year from a consortium of investors that included Singapore’s Temasek, BlackRock Inc, Myriad, Premji Invest and Tybourne. Prior to that, it had raised $133.77 million in a round that was led by eBay.

The other investors in Snapdeal include eBay Inc and former chairman of Tata conglomerate, Ratan Tata.

Softbank’s investment in Snapdeal comes within days of it leading $100 million funding in  Indonesia’s leading e-commerce marketplace, PT Tokopedia, in what is considered the largest ever investment received by an Indonesian startup.

According to Gartner estimates, India’s e-commerce market is set to nearly double in size od consumer spending, going from $3.6 billion in 2014 to $6 billion next year. In July, analysts at Nomura, had said the country’s e-commerce industry’s was at $10 billion in 2013, adding that it could quadruple to $43 billion in the next five years.

Earlier this year, in July, Snapdeal’s primary competitor and India’s largest online retailer Flipkart had raised $1 billion. SoftBank is also the largest investor in China’s Abibaba.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.