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SoftBank buys $627 million stake in online retailer Snapdeal [Jerusalem Post (Israel)]
[October 28, 2014]

SoftBank buys $627 million stake in online retailer Snapdeal [Jerusalem Post (Israel)]


(Jerusalem Post (Israel) Via Acquire Media NewsEdge) Jasper Infotech, which owns and operates online marketplace Snapdeal.com, has raised $627 million (Rs 3,845 crore) from Japanese internet, media and telecom conglomerate SoftBank, the largest single tranche investment in an Indian e-commerce company.



The investment, which closed earlier this month, will make SoftBank the largest stakeholder in Delhi-based Snapdeal, which has now raised close to a $1 billion (Rs 6,132.5 crore) in the current calendar year.

India's e-commerce sector is on fire, especially after Amazon entered the country last June. With some of the biggest retailers in the world jostling to get a piece of action in India, e-commerce companies in the country are riding a wave. For instance, while e-Bay is banking on Snapdeal, both Amazon and Walmart are pushing aggressively to conquer what is fast becoming the last frontier for them.


The investment has been made through SoftBank's recently created unit, SoftBank Internet and Media Inc (SIMI), which is headed by Nikesh Arora, who joined the company earlier this year, from technology behemoth Google, and who has been given the responsibility to aggressively scout for opportunities in emerging markets.

Arora will be joining the Snapdeal board.

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, Arora said in a press statement.

The company will be making strategic investments in ramping up its efforts in technology and supply chain management. To strengthen its technology efforts, it will open innovation centres across the country.

It will also look to make three to four strategic acquisitions over the next few months.

The SoftBank transaction follows Tata Group chairman emeritus Ratan Tata's investment in Snapdeal, in his personal capacity, and which was announced in August earlier this year. Prior to that, the company had raised $105 million in May and $134 million in February.

SoftBank's investment is part of a larger round, in which Snapdeal's existing investors, a list that includes, eBay, BlackRock, the world's largest asset manager, PremjiInvent, the personal investment arm of Wipro Technologies chairman Azim Premji and hedge funds Myriad Asset Management and Tybourne Capital, have also participated.

Snapdeal co-founder and chief executive Kunal Bahl, however, refused to disclose the exact size of the round.

The deal marks the biggest bet taken by Masayoshi Son-led SoftBank on an Indian company., dwarfing the $200 million the investor had pumped into mobile advertising firm InMobi in 2011. Separately, SoftBank has also invested $210 million in Mumbai-based ANI Technologies, which owns and operates Olacabs, an online marketplace for cabs and car rental services.

The strategic investor, which was also an early backer of Yahoo, has a trophy investment in Chinese e-commerce giant Alibaba. Its stake in Alibaba was worth more than $70 billion when the company listed in New York last month.

All rights reserved (c) 2014 The Jerusalem Post Provided by SyndiGate Media Inc. (Syndigate.info).

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