Indian online marketplace Snapdeal raised $133.77 million (about ₹829 crore) from its existing investors led by the US-based marketplace eBay Inc.
With this round, Snapdeal has so far raised $200 million from investors in the last few months.
The previous round of funding, again led by eBay, mopped up $50 million. The other investors were Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital.
While Snapdeal’s Kunal Bahl, in a statement, said that the second round of investment was an “endorsement of the company’s strategy and progress”, eBay said that the latest transaction gives it a larger ownership share in the Indian company. eBay did not divulge the stake it has acquired in the Indian company. Bahl had said that the company was forecasting $1 billion (₹6,000 crore) in gross sales in its upcoming fiscal year.
According to analysts, going by this deal, Snapdeal could be valued at $1 billion. This is on a par with the country’s largest online marketplace Flipkart. The funding also strengthens the belief that the e-commerce industry is all set for a major boom in India.
Other companies such as Flipkart, Myntra and Jabong also have raised funds through many tranches in the last few months.
A recent Crisil report said that the sector is growing rapidly and would touch ₹50,000 crore by 2016. At present, the e-commerce market is valued at $3.1 billion.
Anand Lunia, founder of venture capital firm India Quotient, said that even though eBay has been present in the Indian market for more than a decade, it missed the e-commerce boom.
“This is why the company has invested in Snapdeal, and the investment will also help in taking on competition head-on such as Flipkart and Amazon”.
Ankur Bisen of Technopak Advisors said that eBay is also looking at making serious inroads into the Indian market. Further, the two companies offer similar e-commerce services.