It has been extremely contrasting stuff from Snapdeal, in a gap of past 10-12 hours. We earlier reported via a Reuters exclusive coverage, that the company is eyeing profitability in next couple of years. Now, we are hearing, that two of companies top executives — Head of Corporate Development and a VP — have left the company on unmentioned grounds.
It is common knowledge now, that companies which were once the poster boys of India’s burgeoning startup ecosystem, are now finding it difficult to stay afloat, without appropriate funding. Snapdeal is one of those poster boys, which achieved a unicorn status in an accelerating trend, but has failed to find funds to sustain operations.
Amid such concerns, the company is today seeing the departure of Abhishek Kumar, Head of Corporate development and a January departure of Sandeep Komaravelly, Senior VP and in-charge of Snapdeal’s failed attempt — Shopo. Sandeep has reportedly left to join a new venture after the unit was merged with FreeCharge. [mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#dd3333″ txt_color=”#ffffff”]Snapdeal has been in talks with existing investor SoftBank to raise money at a valuation of $3 to 4 billion.[/mks_pullquote]
As per reports, Abhishek Kumar is currently serving his notice period. He has been working with Snapdeal for close to three years and was overlooking the $400 million acquisition of FreeCharge. He, along with founders Kunal Bahl and Rohit Bansal, was responsible for raising fresh funds for Snapdeal. However, none of the talks seems to have materialized.
Post his exit, Jason Kothari, who has been roped in by Snapdeal as Chief Strategy and Investment Officer, will take over the responsibilities of Abhishek Kumar. Jason was earlier working as the defacto CEO of another troubled brand — Housing.com, before its acquisition.
Commenting on the departure of the two executives, a Snapdeal spokesperson said,
Abhishek Kumar has decided to take forward his entrepreneurial interest, which takes him outside Snapdeal. [Sandeep has] moved on to pursue other opportunities in the entrepreneurial space.
According to people aware of the fundraising development, Snapdeal has been in talks with existing investor SoftBank to raise money at a valuation of $3 to 4 billion. That is a significant markdown from its previous valuation of $6.5 billion when it secured $200 million from Ontario Teachers’ Pension Plan and others in February 2016.
With a shortage of capital, the company has started taking several measures to reduce its cash burn. Earlier, the company moved out of its 200-seat capacity Mumbai office and into a co-working space.
Amidst this funding struggle, the company says that it is on the path to achieving profitability over the next two years. In 2015, the company had indicated a three-year runway to profitability. In 2015-16, the company’s losses increased to Rs 3,316 crore from a loss of Rs 1,328 crore in the year prior, while revenue grew to Rs 1,457 crore from Rs 933 crore.