Looks like Snapdeal found its way with Foxconn in valuation negotiations. The company, to which Alibaba was pegging a $3.5 Billion valuation, has eventually managed to be valued at $4.8 Billion post its massive $500 Million round, which it confirmed yesterday.
Do note though, that Alibaba has still invested on a lower valuation, with Foxconn’s investment balancing out the equation.
Along with them, existing investors of the company, Temasek, BlackRock, Myriad and Premji Invest also participated in this round. The valuation numbers have been revealed by the official documents filed by FIH Mobile, a unit of Taiwanese contract manufacturer Foxconn (via Livemint).
Foxconn is buying a combination of new and existing shares worth $200 million for a 4.27% stake in the company. A $150 million will be invested in the company as fresh capital for about 3.11% stake while the 1.16% stake will be bought from eBay Singapore Services Pvt. Ltd. for about $50 million, as reported previously.
eBay sold a minority stake in Snapdeal and has retained a significant portion of its original investment. With the money earned by selling its stake to Foxconn, it will invest the same for the development of its own business in India.
As per the source, Alibaba has invested about $200 million, but at a lesser valuation. The deal has been in works since the beginning of the year but was delayed due to negotiations with Alibaba.
In an email response to Mint, Alibaba spokesperson, said,
This investment in Snapdeal enhances our exposure to India’s burgeoning e-commerce industry. Snapdeal has a strong presence in mobile commerce and it fits our strategy of investing in innovative companies that are transforming the way people transact.
Kunal Bahl, co-founder and chief executive officer of Snapdeal, said,
We see this milestone as a significant endorsement of Snapdeal’s strategy and commitment to creating life changing experiences for millions of small businesses and consumers in India. With global leaders like Alibaba, Foxconn and SoftBank, in addition to our other existing partners, supporting us, our efforts towards building India’s most impactful digital commerce ecosystem will be propelled further, enabling us to contribute towards creating a Digital India.
Snapdeal was founded in 2010 by Kunal Bahl and Rohit Bansal. Initially, it was started as a deals website and later changed its business model to marketplace. It has more than 1,50,000 sellers and about 15 million-plus products across 500+ categories on its platform.
Till now, the company has raised $1.6 billion in nine funding rounds from nineteen investors. The company has also invested in Zumbi, an online chat portal and Bewakoof, an online apparel start-up.
It has acquired nine companies so far, including eSportsBuy, Shopo, Doozton, Wishpicker, Exclusively, RupeePower, FreeCharge, and MartMobi Technologies.