Ratan Tata To Invest In Snapdeal?
BANGALORE: At a time when online retail is generating investor excitement on the back of exponential growth, chairman emeritus and former chairman of Tata Sons, Ratan Tata is said to be considering a personal investment in Snapdeal.
According to a times of India report, people familiar with the development said that Tata may buy out an early investor in Snapdeal through a secondary sale.
People close to Snapdeal said Tata visited the Delhi headquarters last month to address employees. Tata transformed India's largest private sector corporation and is considering himself a minority investor in the e-commerce firm.
India’s growing e-commerce market is attracting the interest of established business houses and the investment is the indication of the same. According to US venture capital fund Accel Partners, Indian e-commerce is expected to reach $9 billion over the next two years.
With Flipkart and Amazon declaring open war for dominance of India's fast-growing e-commerce market, soon Snapdeal will join it with the huge investment of Tata. Tata has always had an interest in technology; even so, the deal, if it goes through, would mark the ultimate coming together of the old and new guard.
Currently Flipkart is the leading retailer of India with gross sales of about $3 billion and it also raised $1 billion in funding last week. The very next day Amazon announced $2 billion investment and soon with the entry of Snapdeal it will become a threelegged race.
This year Snapdeal has raised two rounds of funds and the total capital raise is about $350 million. The current investors include San Jose-based eBay Inc, Singapore's Temasek, BlackRock, PremjiInvest, Intel, Nexus Venture Partners, NEA-IndoUS Venture Partners and Bessemer Venture Partners.
Four years back Bahl and Rohit Bansal started Snapdeal as a daily deals site, modelled on GroupOn, and later they changed it into an online marketplace for merchants to sell their products.
Snapdeal says it sells about five million products across various categories with over 25 million subscribers operating on a pure-play online marketplace model. Snapdeal also generates over 50% of its orders from mobile phones like FlipKart.