News APP

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  gplay

This article was first published 9 years ago
Home  » Business » Alibaba in talks to invest up to $700 million in Snapdeal

Alibaba in talks to invest up to $700 million in Snapdeal

Source: PTI
March 12, 2015 18:25 IST
Get Rediff News in your Inbox:

Online marketplace Snapdeal is in talks with e-commerce giant Alibaba for upto $700 million investment, which will expand the Chinese firm's footprint in India, sources said.

The global major is likely to invest $ 500-700 million (about Rs 3,100-4,400 crore) and the city-based firm is being valued in the range of $4-5 billion (around Rs 25,000-31,000 crore), sources added.

Alibaba is the world's biggest e-commerce company.

It raised $25 billion through IPO in the US last September — the largest by any firm globally.

Snapdeal has, so far, raised more than $ one billion, including Japanese telecom giant Softbank's $627 million (about Rs 3,762 crore) and former Tata Group Chairman Ratan Tata's personal investment last year. Interestingly, Softbank is also an early investor in Alibaba.

"The talks between Alibaba and Snapdeal are going on and the deal size can be in the range of $ 500-700 million," a person in know of the development said. Another person on condition of anonymity said global investors are putting the valuation of Snapdeal in the range of $ 4-5 billion. Both Alibaba and Snapdeal did not offer any comments.

Marking its debut in India's growing e-commerce investment space last month, Ant Financial Services -- part of the Alibaba Group -- said it will acquire 25 per cent stake in One97 Communications, the parent of mobile commerce firm Paytm.

In November last year, Alibaba founder Jack Ma on a visit to India had said he is keen to invest more in the country and help technology entrepreneurs.

According to research firm IDC, Alibaba is the world's largest online and mobile commerce company by GMV (gross merchandise value) in 2013. For the quarter ended December 31, 2014, its GMV stood at $ 127 billion.

Founded in 2010, Snapdeal founder Kunal Bahl has often referred to the firm as the 'Alibaba of India' since it offers more than 50,000 sellers a platform to reach out to over 25 million users.

Snapdeal's other investors include eBay Temasek, Myriad, Tybourne, Blackrock Inc and Premji Invest. Snapdeal rival Flipkart has also been receiving strong investor interest and had raised a $ 1 billion funding last year, which remains the largest to date in the fledgling Indian eCommerce sector.

Also, another global rival, Amazon has also committed investments of $ 2 billion to bolster its business in India.

A report by consulting firm Technopak pegs the $ 2.3 billion e-tailing market to reach $ 32 billion by 2020. Another report by consultancy firm PwC and industry body Assocham suggests that e-commerce firms are expected to spend up to $ 1.9 billion by 2017-2020 on infrastructure, logistics and warehousing.

Get Rediff News in your Inbox:
Source: PTI© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
 

Moneywiz Live!