Snapdeal partners with eBay, closes $50m funding round
Indian online retailer Snapdeal has raised $50 million from lead investor eBay, Intel Capital, Saama Capital, Russian VC ru-Net and Japan’s Recruit Holdings. Existing investors Bessemer Venture, Nexus Venture Partners and Kalaari Capital also participated in the round, along with angel investors.
eBay and Recruit invested in the first part of the round, as reported earlier in April. The transaction is reported to value the Indian startup at around $250 million.
Snapdeal has also entered into a commercial partnership with eBay, which already has an India-specific online marketplace, launched in 2005. The deal is expected to allow eBay India to promote its products to Snapdeal's users and vice versa. eBay will also have access to the Indian retailer's logistics software and distribution network.
The two retailers have different vendor models - Snapdeal takes listings from businesses while eBay India has individuals selling goods.
Launched in 2010, Snapdeal has grown to 20 million registered users, and delivers to over 4,000 cities in India. eBay India, has just five million registered users in 4,306 towns and cities.
eBay has increased emphasis on international growth following a slowdown in US sales. The company wants 12% of its sales to come from the BRIC countries by 2015 in a global e-commerce market worth $300 billion. Its Snapdeal partnership coincides with this week's launch of Amazon India.
According to the Internet and Mobile Association of India, the Indian e-commerce market is projected to grow from approximately $1.2 billion in 2012 to $1.8 billion in 2013.
Snapdeal is one of the bigger players in the segment, and has raised a total of $102 million in funding. Kalaari and Nexus committed $12 million to the company in January 2011, data from AVCJ Research show. A second round came six months later, the two VC firms returning with another $40 million in capital, this time supported by Bessemer.
It acquired Shopo.in earlier this month to expand its range of designer and handicraft products. Rival flipkart.com, backed by Tiger Global Management and Accel Partners, also consolidated its place by buying Letsbuy.com for an estimated $25 million.
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