The three-way battle for India’s ecommerce market has just intensified. Snapdeal announced yesterday a $200 million funding round as it ramps up competition against Amazon and Flipkart. The investment was led by Ontario Teachers’ Pension Plan, one of the world’s largest pension funds, and Singapore-based investment entity Brother Fortune Apparel, among others.
The new investment puts Snapdeal’s valuation in the $6.5-$7 billion range, making it the second most valuable startup in India, after Flipkart. The current figure represents a 35 percent jump from its previous valuation of $4.8 billion, and follows a $500 million investment almost a half-year ago. China’s Foxconn and Alibaba led that round, exhibiting their interest in backing a company to compete with Amazon in India.
Last month, Snapdeal’s corporate parent, Jasper Infotech, reported a loss of Rs. 1328 crore (almost $195 million) for the previous financial year. The company’s losses had increased five-fold in just 12 months, primarily as a result of spending heavily to maintain Snapdeal’s market share amidst growing competition from Amazon and Flipkart.
Snapdeal says that the capital raised will be used to further build out its technology platform, logistics, payments, and back-end infrastructure.
“We see these investments as a continuing endorsement of Snapdeal’s strategy to build India’s most reliable and frictionless commerce ecosystem,” said Anup Vikal, chief financial officer at Jasper Infotech, in a statement. “We continue to make targeted investments in building internal and external capabilities that will enable us to consistently deliver optimal experience for the millions of buyers and sellers who transact daily on Snapdeal.”
Since 2010, Jasper Infotech has raised more than $2 billion for Snapdeal from multiple investors, including PremjiInvest, Intel Capital, Bessemer Venture Partners, Ratan Tata, Japan’s SoftBank, China’s Alibaba Group, and Taiwan’s Foxconn. With India’s ecommerce race showing no signs of slowing, it’s likely that Jasper is already preparing to raise even more investment for Snapdeal.
Originally published on The Tech Portal, an India-based tech publication.