Snapdeal has raised $500 million in a fresh round of funding led by Alibaba Group, Foxconn and SoftBank. Existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in the latest round, which values Snapdeal at $5 billion.

Foxconn, which makes phones for such global brands as Microsoft and Apple, said that it contributed $200 million of the investment, which gives it a 4.27 per cent stake in Snapdeal.

FIH Mobile, a unit of Foxconn, made this investment through Wonderful Stars Pte Ltd, an indirect wholly-owned subsidiary incorporated in Singapore.

Recently, Foxconn’s Chairman Terry Gou had said his firm was aiming to develop 10-12 facilities in India, including factories and data centres, by 2020.

Analysts said the discussion with Snapdeal was part of the Taiwanese company’s strategy to invest in start-ups and e-commerce companies as Gou grapples with tight margins in the phone manufacturing business.

For Alibaba, the investment in Snapdeal will be its second in India. In February, the Chinese e-commerce major had picked up a 25 per cent stake in mobile commerce company Paytm for $700 million. When Alibaba’s founder Jack Ma visited India in April, he had indicated that he wants to see a bigger play in India. 

Simultaneously, eBay, an early investor in Snapdeal, has sold a part of its stake in the e-commerce company. It did not disclose any details.

Scott Schenkel, Senior Vice-President and Chief Financial Officer, eBay, said in a statement on the company’s website that “over the past two years, the valuation of Snapdeal has significantly increased, and because eBay was an early investor, this sale will enable us to earn a strong return on our invested capital and strategically redeploy it into other areas of our business.”

Snapdeal had raised more than $1 billion, from investors including SoftBank ($627 million) and iconic business leader Ratan Tata (personal investment).

According to information provided by FIH Mobile to The Stock Exchange of Hong Kong, the India incorporated Jasper Infotech Pvt Ltd, which owns and operates Snapdeal.com, reported a loss of $206 million for the year ended March 31, 2015 against a loss of $41 million the previous year. It had net assets of $861 million as of March 31, 2015.

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