Once the biggest competitor to Bengaluru-based online marketplace giant Flipkart, Gurugram-based beleaguered firm Jasper Infotech, the holding company of the erstwhile e-commerce major Snapdeal, on Friday sold its logistics arm Vulcan Express Private Limited in an all-cash deal to Kishore Biyani's Future Supply Chain Solutions for Rs 350 million. Jasper Infotech has entered into an agreement with Future Supply Chain Solutions, retail giant Future Group’s organised third-party and logistics service provider, to sell 100 per cent stake in Vulcan Express Private Limited. This is the second garage sale that the Kunal Bahl and Rohit Bansal-led e-commerce firm has done after it sold its mobile wallet FreeCharge to Axis Bank for Rs 3.8 billion last year. Sources at Snapdeal said the Future Group would be onboarding the technology and also absorb the team of 75-100 odd employees into the company. While the Future Group is keeping its plans under wraps, industry insiders are of the opinion that Future Supply Chain Solutions will not only continue working with Vulcan’s present set of clients, but also bring in new ones, in addition to handling the logistics for its parent company. Vulcan Express is one of the few logistics firms in India that provides end-to-end solutions, including pick-up, consolidation, warehousing, intercity movement, last-mile delivery, payments collection, and reverse logistics. Operating pan-India, across 100 cities and 2,000 PIN-codes, its network is designed to provide GST-friendly supply-chain solutions, with capabilities sharply focused on the leading consumption centres in the country. The logistics company will also keep servicing Snapdeal’s orders. “Through Vulcan, we plan to boost our last-mile capabilities and also offer state-of-the-art solutions to our e-commerce and retail clients. This will also help us realise our disruptive vision of Retail 3.0,” Kishore Biyani, founder and chairman of the Future Group, said. Snapdeal had been making several attempts to sell Vulcan for the past two years. Earlier, the company was in talks with TVS Logistics, and Gati, among others, in this regard. Last year, Jasper Infotech had put in around Rs 270 million more into the arm.Snapdeal, which has been trying to salvage the last bits of its company, has been cutting it down to size for the past two years. Sources in the company claimed that Snapdeal hoped to cut down its losses to zero by the end of this year. “The company is not making money, but it is not losing it either, as losses are down to minimal. Business has steadied and by end of the year it hopes that the burn would be zero,” a source said. According to the most recent RoC filing, Snapdeal’s revenue dropped to Rs 9.03 billion for the year ended 2017 against Rs 14.57 billion a year before that. “Basically, while the revenue is down from the previous year, it is more of a conscious choice, as the company is moving away from marketplace commission. Over the last many quarters, Snapdeal has re-jigged its category mix, selling less of loss-making products. The company is trying to have a more judicious category mix. That is one of the reasons for the losses,” the source added. Jasper Infotech has been trying to sell most of its subsidiaries from the time the company started to go down two years ago, after its main backer SoftBank Group stopped pumping fresh funding into the firm. Once its ‘crown jewel’ FreeCharge, which was at one point the second-largest mobile wallet player in India, was sold to Axis Bank at almost one-tenth of the price. The company is now left with Unicommerce, an e-commerce management firm that it believes is a profit-making firm and would be keeping it in the group at least for the near future. Last year in May, it received Rs 1.13 billion in funding from founders Kunal Bahl and Rohit Bansal and existing investor Nexus Venture Partners.
Future Supply Chain Solutions buys Snapdeal's logistics arm for Rs 350 mn
The deal with Future Group will help Snapdeal, which is looking to shed its non-core assets in a bid to survive in the hyper-competitive e-commerce market
Karan Choudhury |