Indian e-commerce marketplace Snapdeal has accepted Flipkart’s revised acquisition offer of US$900 million-US$950 million, says Reuters report citing unnamed sources. This comes amidst the reports that Infibeam, another player in this domain, joined the fray to acquire the Noida-based Snapdeal for US$1 billion.
The approval came last week, and the deal is now awaiting the nod of Snapdeal’s shareholders. It is not immediately clear if the offer also includes its units, such as payments unit FreeCharge, logistics business Vulcan Express, and online order management business Unicommerce eSolutions. Neither Flipkart nor Snapdeal offered any comments yet.
Flipkart had initially approached Snapdeal with a US$500-600 million offer but it was rejected. Two weeks later, it came up with a revised offer of US$850 million.
Founded in February 2010, Snapdeal was the second biggest e-commerce company after Flipkart until 2015. It was valued US$6.5 billion when it raised funding early last year. The company began to crash after the entry of Amazon, which ate into its market share to become a formidable force in the Indian e-commerce market. Over the past two years, Snapdeal kept losing market share to both Amazon and Flipkart, despite having invested significantly in branding and marketing.
To date, Snapdeal has raised about US$2.18 billion in investment, which included a US$627 million from SoftBank in 2014. Its other investors include Kalaari Capital, Nexus Venture Partners, BlackRock, Temasek, Foxconn, eBay, Premji Invest, Intel Capital, Bessemer Venture Partners, and Ratan Tata. Recently, eBay invested nearly US$500 million in Flipkart and sold its Indian unit to the Bangalore-based company.
Recently, Snapdeal received about US$17.5 million in emergency financing from existing investor Nexus Venture Partners and Co-founders Kunal Bahl and Rohit Bansal.
A few weeks ago, an online seller group sought the intervention of the government of India to stop Snapdeal from proceeding with its merger with Flipkart, until the former settles payment dues of sellers on its platform. However, Snapdeal refuted their claims and said it did not owe money to sellers on its platform.