New Delhi: Japan’s SoftBank, e-commerce giant Alibaba Group and Taiwan-based Foxconn Technology will invest USD 500 million (about Rs 3,269 crore) in e-tailer Snapdeal where eBay Inc is cutting its stake. While Jasper Infotech Pvt, which owns Snapdeal, did not specify the individual investments being made, FIH Mobile Ltd – a unit of Foxconn — said it is picking up 4.27 per cent stake in the company for USD 200 million.
Snapdeal said existing investors Temasek Holdings Pte, BlackRock Inc, Myriad and Premji Invest also participated in the fund raising. The company had raised more than USD 1 billion, from investors including Softbank (USD 627 million) and iconic business leader Ratan Tata (personal investment).
“We see this milestone as a significant endorsement of Snapdeal’s strategy and commitment to create life changing experiences for millions of small businesses and consumers in India,” Snapdeal Co-Founder and CEO Kunal Bahl said. Foxconn’s investment, which was by way of buying 2,967 compulsorily convertible cumulative preference shares from eBay for USD 50 million cash and subscribing to 79,113 such shares of Jasper for USD 150 million, values Snapdeal at about USD 4.7- 5 billion.
Snapdeal, which began as a coupon platform similar to Groupon Inc when it was founded in February 2010, is one of India’s three biggest e-tailers. US company eBay said it would retain “a significant portion” of its original investment in Snapdeal and the partial stake sale will help it to earn a strong return on capital invested.
It said the cash would be redeployed in other areas of eBay’s business, adding that it will focus on boosting its presence in India, which it considers an important market in its fast-growing Asia Pacific region.