Softbank injects $627m into India e-commerce firm Snapdeal
Japanese tech giant SoftBank Group has agreed to invest $627 million in Indian e-commerce site Snapdeal, bringing the start-up's total funding to more than $1 billion.
The investment - made via SoftBank unit SoftBank Internet and Media (SIMI) - represents the the biggest e-commerce deal in the country since the $1 billion round raised by Snapdeal rival Flipkart in July.
Snapdeal was launched in 2010 and currently claims 25 million registered users and more than 50,000 business sellers. It will use the new capital to expand its operations and help compete with market rivals.
According to a statement, SoftBank also wants to exploit synergies with its own network of internet companies to support Snapdeal's growth. The Japanese firm will become Snapdeal's largest investor, with Nikesh Arora, CEO of SIMI, joining the company's board.
The start-up held its last funding round in May when it sourced $100 million from Temasek Holdings, BlackRock, Premji Invest, Myriad Asset Management and Tybourne Capital Management. Earlier in the year, it raised $133.8 million from eBay, Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital.
This is the second Snapdeal investment for SoftBank, which committed $74 million last year. Other investors in the round included Russia's ru-Net, Japan's Recruit Holdings and Ratan Tata, the former chairman of India conglomerate Tata.
The investment also marks the start of an India spending spree for the Japanese telecom giant which previously said it would inject $10 billion in the country's most promising tech start-ups. It also coincides with Softbank's $210 million investment in car-sharing service Ola Cabs.
India's online retail space is currently in the midst of a funding arms race in as VC-backed players raise ever-larger rounds to compete with each other and multinational rivals like Amazon.com and eBay. Amazon previously announced it would commit $2 billion to its India business shortly after Flipkart raised its latest round.
The sector has also seen some consolidation with Flipkart acquiring e-fashion retailer Myntra for $300 million in May. According to investment firm CLSA, India's e-commerce market is valued at $3.1 billion, excluding travel services and tickets. A recent report by Technopak Advisors projects the market will grow to $56 billion by 2023.
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