Funding for Indian e-commerce companies has mostly remained a lacklustre affair this year. While Flipkart has struggled to hold its foot amidst internal changes, investor markdowns, and employee exits, it is Snapdeal which has shown a slightly active presence. After raising $200 million in February, Snapdeal parent Jasper Infotech has reportedly topped that amount by another $21 million.
An ET report said that the company has raised $21 million from Luxembourg-based investor called Clouse SA . It cited documents filed with Registrar of Companies for the information. They revealed that it was part of ongoing Series J round started in February.
What is noteworthy is that Snapdeal has managed to raise this round at the existing valuation of $6.5. This would come as a relief to the company as there have been consistent reports that both Snapdeal and Flipkart might have to go for a down round to meet funding needs.
A spokesperson of the company confirmed the development and said in a statement,
“The raising of fresh funds at a consistent pre-money valuation, is a reflection of the robust performance of Snapdeal, and its continued focus on building a long-term business, based on strong fundamentals, like best-in-class customer experience and consistent growth in net revenue.”
Possibly hinting towards the dried funding scenario, he said that investors are keen to support businesses based on real performance metrics. He further added that there was a huge interest in digital commerce market in India.
Clouse SA is the latest addition to investors in Snapdeal after Brother Fortune Apparel which had invested in February. Notably, Brother Fortune represents several HNIs of China and took part in the round along with Bennett, Coleman & Co Ltd (BCCL) and Ontario Teachers’ Pension Plan.
One could say that the fresh funding could not have arrived at a more opportune time for Snapdeal. The festive season is about to start and the e-commerce companies are gearing up to take maximum advantage of it. And an additional supply of cash can significantly make an impact.
To leverage the Diwali season, Snapdeal has already announced that it plans to shell 200 crores from its account solely for a 360-degree marketing campaign. The campaign will go on for next two months till Diwali.
Earlier it had also opened new warehouses under its in-house logistics company Vulcan Express to prepare for the surge in demand in the festive season.
It remains to be seen how much these efforts are going to pay for Snapdeal. More important concern if they would be enough to deal with Amazon India.
The US-based giant has already displaced it from the second position in terms of the number of shipments. In fact, it may have displaced even Flipkart from the top in terms of sales in July.