Alibaba in funding talks with Snapdeal: source

Media reports said Snapdeal is seeking $1 billion in its latest funding round to fuel growth

Alibaba is in talks with Indian online marketplace Snapdeal over a potential cash investment, a source familiar with the negotiations said, in what would be the Chinese e-commerce giant's first direct investment in India.

Snapdeal competes in India with bigger rivals Flipkart.com and Amazon.com, and media reports have said it is seeking $1 billion in its latest funding round to fuel growth.

In October last year, Snapdeal secured a $627 million investment from Japan's Softbank, itself an early backer of Alibaba.

The source, who declined to be named as talks are not public, said on Wednesday that negotiations were "ongoing", confirming Indian media reports. The source said Alibaba was "looking, but there's still no deal".

A second source familiar with the matter confirmed the two sides had spoken in the past and said investor interest was "high", but gave no detail on any current negotiations.

Snapdeal declined to comment.

Alibaba has been eyeing India for months, but has yet to invest directly in the e-commerce space. Ant Financial, an affiliate of Alibaba controlled by senior Alibaba executives, bought a 25 percent stake in the Indian payment services provider behind Paytm last month.