Snapdeal founders, NVP invest Rs 113 crore in parent company

Funds to be infused into Unicommerce, a platform owned by Jasper Infotech

Jasper Infotech Pvt Ltd, which owns e-commerce marketplace Snapdeal, has received Rs 113 crore in funding from founders Kunal Bahl, Rohit Bansal and existing investor Nexus Venture Partners (NVP).

The capital will be infused into Unicommerce, a platform for e-commerce sellers to track orders across marketplaces, which is owned by Jasper Infotech, said a source close to the board of the company.

Both Bansal and Bahl have invested Rs 8.45 crore each, while NVP has invested Rs 96.2 crore in Jasper Infotech Pvt Ltd, the company said in its filings to the registrar of companies on Monday.

The investment was approved at an Extraordinary General Meeting of the company held on March 10. The founders, along with NVP, were offered 17,410 Series J1 preference shares for their investments, said the disclosure, which comes at a time when Flipkart has begun doing due diligence to acquire marketplace Snapdeal.

SoftBank, the largest investor in Snapdeal, has pushed for the company’s sale to Flipkart, for which the latter signed a term sheet last week. The Japanese investor had written off $1 billion in losses from Snapdeal for the year that ended March 2017. 

Flipkart has now taken the position of the sole Indian firm that can rival Amazon and Alibaba in India. The company recently raised $1.4 billion from Tencent, eBay and Microsoft, with SoftBank having shown interest to invest further into the Flipkart-Snapdeal merged entity.

Sources close to the development say that SoftBank could partially buy out Tiger Global’s share in Flipkart with close to $1 billion that would help the US fund recover the principal amount it invested. SoftBank could choose to further enhance its stake in Flipkart with a bigger investment.

Experts say the partial exit of Tiger Global and the entry of SoftBank as Flipkart’s investor could give the firm the confidence to take on Amazon and Alibaba. With long-term backers on board, the company can relieve itself of trying to grow its valuation and focus on differentiating itself to keep customers coming back.

Moreover, even with Alibaba’s entry into India, the newfound sanity in e-commerce isn’t expected to go away. While players will continue to offer discounts to get customers hooked to shopping on their platforms, the scale is expected to be much smaller than what was witnessed in 2014 and 2015.

Instead, e-commerce players in India will focus on winning customer loyalty using tools such as Amazon Prime, that actually bring benefit to customers. Amazon, the chief rival of Flipkart, is seen to be investing as much as $2 billion in the past one year to grow in India and the rate of investment doesn’t seem to be waning anytime soon.