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.
This fresh round also saw participation from existing investor SoftBank, which infused a whopping $627 Million into India’s second largest e-commerce brand last year.
Prior to this round, Snapdeal had raised more than $1 billion in venture capital from investors including SoftBank, eBay, BlackRock, Bessemer Ventures and Indian venture firms such as Kalaari Capital and Nexus Venture Partners.
The investment though, is perhaps not a surprise, considering how both Flipkart and Snapdeal were looking at massive fundraises to support their deep-discount models ahead of upcoming Diwali Festive season. And while Flipkart raised $700 Million at a $15 Billion valuation, expected valuation for Snapdeal, as per previous reports, is close to $3.5 Billion.
None of the companies, including Alibaba and Foxconn, have responded to comment requests.
While this investment offers Snapdeal a massive cash reserve to take on the likes of more heavily-backed Flipkart and Amazon, this give Alibaba, an even firmer footing in world’s fastest growing e-commerce market.
Alibaba, world’s largest e-commerce company, had first stepped into India with a massive $585 Million investment into PayTM, via its financial arm, Ant Financials. This snapdeal investment would take Alibaba’s investments into Indian e-commerce space at new heights. And considering Alibaba’s recent measures to allow Indian sellers to sell in China, and vice-versa, you can expect this investment spree to only grow in future.
In a related development, Snapdeal has also announced the launch of its new instant delivery service, called Snapdeal Instant, which is a hyperlocal delivery service currently in pilot phase in 3 Indian cities –Delhi, Bangalore and Mumbai.
The image shows Snapdeal co-founders during their previous SoftBank investment.