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Online marketplace Snapdeal has raised $627 million in its latest round from Softbank, the company said in a statement.
Through this strategic investment and partnership with Snapdeal, the SoftBank Group aims to further strengthen its presence in India and leverage synergies with its network of Internet companies around the world.
Masayoshi Son, Chairman and CEO of SoftBank Corp. said, “Since SoftBank’s foundation, our mission has been to contribute to people’s lives through the Information Revolution. We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade. As part of this belief, we intend to deploy significant capital in India over the next few years to support development of the market.”
Kunal Bahl, Co-founder and CEO of Snapdeal, said, “Our entire team at Snapdeal is thrilled and honoured to have SoftBank as a strategic partner. With the support of Son-san and Nikesh [Nikesh Arora, Vice Chairman of SoftBank], we are confident we will further strengthen our promise to consumers and create life changing experiences for 1 million small businesses in India.”
Arora will be joining the board of Snapdeal as part of this strategic investment by the SoftBank Group.
Morrison & Foerster LLP acted as legal advisor to SoftBank, with Kochhar & Co. advising SoftBank on India law matters.
Funds raised so far this year
Snapdeal.com, alone this year, has raised up to $1 billion. With this funding, Softbank is now the leading investor in Snapdeal.com. This is the largest investment made by a single investor in an e-commerce company in India. Other existing investors have also participated in this round with a significant undisclosed investment.
Earlier this year, the company raised $133.77 million (February 2014) as a result of a round led by eBay and $105 million (May 2014) as result of a financial round which saw participation from institutional investors - Temasek, Myriad, Tybourne, Blackrock Inc. and Premji Invest. Ratan Tata, Chairman Emeritus, Tata Sons, also made a personal investment into the company.
"These investments stand testimony to confidence displayed by investors in the company’s pure marketplace model and are in line with Snapdeal.com’s growth strategy and vision to create life changing experiences for 1 million businesses in India," the company added.
In order to further the tremendous growth Snapdeal.com has seen so far, the company will be making strategic investments in ramping up its efforts in technology and supply chain management.
Innovation centres
To strengthen its Technology efforts, the company will open innovation centres across the country. After Delhi, it has already opened its second innovation centre in Bangalore and plans to open innovation centres in cities like Hyderabad and Pune. The company will also double its technology team size to 1,000 by the end of the current financial year. To strengthen its Supply Chain efforts, the company also looks to expand its fulfilment centres to 30 cities. It currently has 40 fulfilment centres in 15 cities. With the vision to enable SMBs in India to do business online, Snapdeal.com aims to expand its merchant base to 1 million in the next 3 years. The setting up of fulfilment centres is in line with the same as it will not only enrich the shopping experience for buyers but will also further enable SMBs that do not have the necessary resources to handle deliveries at their end.
Further, Snapdeal.com will look to make 3-4 strategic acquisitions in the coming few months specifically in the area of mobile technology. With mobile commerce fast gaining pace in the country, Snapdeal.com within the next 6 months, will also set up an incubation centre to hone and harness start-up businesses in the mobile technology space.
Snapdeal was founded in February 2010 by Kunal Bahl and Rohit Bansal. The company witnessed phenomenal growth in 2013-14, growing 600 per cent from 2013 to 2014.
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