Snapdeal co-founders Kunal Bahl and Rohit Bansal are on a disaster-management spree. After calling off the merger with Flipkart, negotiations for which had been on for half a year, the struggling online marketplace is said to be slashing over 80 percent of its workforce, and pivoting as ‘Snapdeal 2.0’ in the months to come. In order to pacify unnerved employees, CEO Bahl wrote an email announcing that Snapdeal 2.0 will emerge as the “champion of all sellers” within a year, and clock profits of Rs 150 crore. The email has been accessed by ET.
“We will be continuing the Snapdeal journey as an independent company. As we have often discussed, the opportunity of e-commerce in India is immense, and the surface of this $200 billion market has barely been scratched yet. We have a tremendous team, millions of loyal customers, hundreds of thousands of motivated sellers and a phenomenal platform that has been built with years of effort. All the ingredients of success have always been there in our company,” Bahl wrote. Describing the last few months as “tumultuous”, Bahl said that the deal which was being contemplated “was incredibly complex to execute”. ALSO READ: Snapdeal calls off merger with Flipkart after several months of negotiations
Snapdeal had bifurcated its core marketplace, and non-core assets for separate sales. Flipkart had offered to buy the marketplace for an $900 million, that was significantly lesser than Snapdeal’s erstwhile valuation of $6.5 billion. Snapdeal founders refused to part with their control over the company, and eventually, backed out of the deal. Snapdeal’s key investor SoftBank said in a statement, “Supporting entrepreneurs and their vision and aspirations is at the heart of Masayoshi Son’s and SoftBank’s investment philosophy. As such, we respect the decision [of Snapdeal] to pursue an independent strategy.” ALSO READ: Axis Bank to acquire Freecharge from e-commerce company Snapdeal
Bahl stressed on his letter that Snapdeal was “self-sufficient” going forward. “With the ongoing streamlining of costs and sale of some of our assets, such as Freecharge, we are financially self sufficient… and don’t need to raise additional capital to reach profitability.” He also added that Snapdeal 2.0 will spend less and look to develop a “hyper efficient culture” that can deliver profitable growth month on month. While the founders might be trying hard to instil new confidence in its beleaguered team, the e-commerce space they would operate in is likely to get tougher, with Amazon breathing down their neck and even Flipkart upping its game.