In a new development, online marketplace Snapdeal is in talks with Alibaba for raising $1 billion (approximately Rs 6,200 crore) in its latest funding round. Snapdeal, is aiming for a valuation of at least $5 billion (approximately Rs 30,000 crore). Also Read - Amazon School from Home store live in India: What's newAlso Read - Flipkart Big Saving Days smartphone deals: Pixel 4a is star of the show once again
Economic Times reports that Snapdeal s top executives, including co-founder Kunal Bahl, were in China last week to conduct negotiations with Alibaba. According to the report, the Delhi-based ecommerce giant is looking for a combination of money and a marquee name to compete and stay on top in India’s online retail sector. Also Read - Realme X7 Max 5G goes on sale in India today at 12PM on Flipkart: Should you buy?
“Snapdeal has a term sheet from Alibaba, but is not getting the valuation it wants. On the other hand, private equity firms are making higher offers, so it can likely be a joint investment,” the publication’s sources said.
In October, Snapdeal raised $627 million from Japan’s SoftBank, valuing the company $1.8 billion. The company has been reportedly in discussions with Alibaba since then, but they seem to differ on the valuation front every time.
Snapdeal needs the funds to expand its business stronghold in India, as chief rivals Flipkart and Amazon are creating deep pockets financially to spur individual growth. Snapdeal also reportedly wants to acquire Bangalore-based Komli media for $300 million and is also looking to bolster its technology to stay relevant in the competitive market.
International investors are showing a lot of interest in the rise of Internet retail business in the country, and Snapdeal hopes that Alibaba will come to terms with its negotiation.
Flipkart was valued at $11 billion and managed to raise $700 million in last funding round in December 2014, with many new investors joining the bandwagon. Amazon India has its US counterpart’s backing, with Jeff Bezos announcing $2 billion investment to expand operations in India.
In comparison, Snapdeal has a long way to go, with its current valuation at $1.8 billion. Alibaba’s jack Ma, on his last visit to India, hinted the company’s interest in investing in India’s ecommerce industry. It acquired a 25 percent stake in Paytm for an undisclosed sum last month.