New Delhi: Aimed at tapping the "huge opportunity" in Indian e-commerce space, eBay is leading a USD 133.77 million (about Rs 830 crore) investment in online market place Snapdeal.
The US-based firm led a group of investors including Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital to invest in the New Delhi-based Snapdeal.
In April 2013, Snapdeal had raised USD 50 million from eBay-led group of investors. After this round of funding, the total investments raised so far by the home grown online marketplace rose to over USD 235 million (about Rs 2,457 crore).
"We are excited to grow eBay India under a great management team and to invest in the complementary Marketplace Snapdeal. India is a huge opportunity," eBay President Marketplaces Devin Wenig said in a Twitter post. "Multiple brands working together improves overall chance of success. We've done same successfully in other markets," he added. Growing wealth, acceptance of technology and smartphone penetration will help the e-commerce market in the world's second most populous country, Wenig said. "India market growth will accelerate, helped by improvements in payments, delivery, and smartphone penetration. Growing wealth, high acceptance of technology, commerce arbitrage and other factors driving exceptional growth rates in Indian digital commerce," he added.
Meanwhile, late on Wednesday night, both eBay and Snapdeal in separate statements said eBay was leading a new USD 133.77 million round of funding in Snapdeal, raising its stake in the company following an initial investment made in 2013. Accelerating growth in India and other emerging markets continues to be a core strategy for driving eBay's global e-commerce leadership, eBay Senior VP and APAC Managing Director Jay Lee said.
"We continue to invest in Snapdeal due to its complementary business model, good management team and strong brand," he added. Commenting on the deal, Snapdeal co-founder and CEO Kunal Bahl said: "All our current institutional investors including Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital have participated in this round as well which is a strong endorsement of our team."
With revenues expected to clock USD 500 million this fiscal ending next month and targeted revenues of USD 1 billion by March 2015, Snapdeal is also eyeing a listing on US bourses to raise capital.
Launched in 2010, the company, with a headcount of over 1,000 people, offers products across more than 500 product categories through 20,000 sellers and delivers to more than 4,000 cities in India. Besides Snapdeal, other large e-commerce players like Flipkart and Myntra have also led similar successful fund raising missions.
Flipkart has raised over USD 360 million (around Rs 2,232 crore) in funding from various investors including Morgan Stanley Investment Management, the largest by an Indian e-commerce firm. Similarly, earlier this month online fashion retailer Myntra said it has received funding worth USD 50 million (about Rs 30 crore) from a group of investors led by Premji Invest, the family investment arm of Wipro Chairman Azim Premji.
The company said it has so far raised USD 75 million (about Rs 465 crore) from investors including Accel Partners and Tiger Global, ever since it was launched in 2007. In the past few years, India – which has over 230 million Internet users – has witnessed more than 1,200 e-commerce firms opening shop in the country since 2009.
Crisil Research said it expects online retailing, both direct and through marketplaces, to become a Rs 50,000 crore industry by 2016, growing at a whopping 50-55 per cent annually over the next three years. The segment has been growing in India, with revenues surging from around Rs 1,500 crore in 2007-08 to an estimated Rs 13,900 crore in 2012-13, or a annual growth rate of 56 per cent, it added.
