As has been rumoured for quite some time now, Snapdeal has reportedly raised a staggering $500 Million in a fresh funding round from two of China’s biggest firms – e-commerce giant Alibaba and iPhone’s largest manufacturer, Foxconn.
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Snapdeal had earlier raised over $1 billion from investors including BlackRock and eBay.
One of the people said the deal could be finalised within a few days at the earliest but may also take weeks. The person was not authorized to disclose the matter and so declined to be identified.
Interestingly, all three e-commerce players appear to see rural India as a potential growth market. SoftBank poured $627 million into the online retail platform a year ago.
Alibaba and Foxconn refused to comment.
The move is aimed at boosting the company’s valuations and spending capacity as it competes with rivals Flipkart Online Services Pvt Ltd and the local subsidiary of Amazon.com Inc in the country’s online shopping market, which Morgan Stanley estimates will be worth $102 billion by 2020.
Alibaba was in direct funding talks with Snapdeal in March, however opted to as an alternative make investments along with SoftBank and Foxconn, the individual conversant in the $ 500 million funding stated.
Online publication Re/code first reported the investment on Sunday, citing multiple sources and saying the deal had already concluded.
The deal can be Alibaba’s first direct funding in India, though affiliate Ant Financial Services Group [ANTFIN.UL] in February agreed to purchase 25 % of Indian cost providers agency One97 Communications.
Recently, Foxconn founder Terry Gou had said India is a key market this year for his group. The capital infusion brings Snapdeal’s total valuation to $5 billion, behind Amazon and the $15 billion Flipkart, but improves its position in the marketplace.
This is Alibaba’s second major investment in India – They have previously invested around $575 million in Paytm, India’s largest mobile wallet and ecommerce company.
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The deal will forge an alliance between Snapdeal and Alibaba, China’s leading e-commerce company, raising the prospect of partnering on technology and products.
