China’s Alibaba Group Holding, Japan’s SoftBank Group and Foxconn will lead an investment of $500 million in Snapdeal, the online marketplace said on Tuesday, as it seeks to expand in the country’s fast growing eCommerce sector.
The move is a vote of confidence from three of the world’s biggest technology companies in Snapdeal, which in October got a $627-million investment from SoftBank, also an early backer of Alibaba. Snapdeal, which bills itself as India’s version of Alibaba, did not break out individual investments. EBay, an early backer of the company, is selling part of its stake in a transaction which also involves fresh funding.
Existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in the funding round, Snapdeal said, without giving further details.
EBay said in a statement it has sold a portion of its stake and would focus on boosting its own business in the country. Separately, FIH Mobile, a unit of Taiwan’s Foxconn, the trading name of Hon Hai Precision Industry, said it was buying a 4.27 per cent stake in Snapdeal for $200 million via its Singapore-based subsidiary Wonderful Stars.
Sources told Reuters this month that the transaction would value Snapdeal at more than $5 billion. In India, Snapdeal rivals Flipkart, valued at around $15 billion, and Amazon.com India unit as the three fight it out for a share of a $22 billion market.
Like its rivals, Snapdeal sees the majority of its transactions on smartphones and mobile devices. “That is why, with a significant share of eCommerce transactions in India being done via mobile devices, the investment positions FIH to benefit from Snapdeal’s platform,” Foxconn said.
Alibaba and eBay are also looking to benefit from India’s fast growing online sector, boosted by a rise in use of affordable smartphones and internet connections. India is the world’s third-biggest smartphone market after China and the United States.
Existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in the funding round
The move is a vote of confidence from three of the world's biggest technology companies in Snapdeal
FIH Mobile, a unit of Taiwan’s Foxconn, said it was buying a 4.27 percent stake in Snapdeal for $200 million
Snapdeal had raised $627 million investment from SoftBank in October 2014