Update: SoftBank Internet and Media Inc (SIMI) has officially confirmed (pdf) that SoftBank Group is investing $627 million in Snapdeal. With this investment, SIMI mentions that SoftBank Group is now the largest investor in Snapdeal. SIMI CEO Nikesh Arora is joining the company board as part of the investment.
Snapdeal claims to currently have more than 25 million registered users and more than 50,000 merchants. It also claims to offer more than 5 million products across more than 500 categories.
Along with Snapdeal, SoftBank also confirmed that it is leading a $210 million investment into the online cab booking service Olacabs. The company has committed an investment of $10 billion into India’s information technology (IT) and communications segment, reports PTI.
Earlier (Oct 15): Online marketplace Snapdeal is close to raising $600-$650 million from its existing investors, reports Reuters, citing three sources involved in the fundraising. MediaNama’s sources have indicated that Snapdeal is raising $650 million, at a valuation of $1.2 billion. The fund raising is expected to announced next week. Snapdeal, on being contacted by MediaNama, said that “This is speculation and we don’t comment on speculations.” We had asked Snapdeal to confirm whether it is raising funds from Softbank, and whether the funding amount is $650 million.
Snapdeal has raised over $300 million in funding as yet including the $100 million from Temasek Holdings and others in May, $133.7 million from eBay and others in February, $50 million from existing investors in June 2013 and $52 million in 2011 in separate rounds of funding fromBessemer Ventures Partners, Indo-US Venture Partners and Nexus Venture Partners. Snapdeal is planning a Home Shopping channel, having formed a joint venture with cable TV distribution company DEN Networks. It also raised money (only a small amount, we’ve heard) from Ratan Tata, the Chairman of Tata Sons, following which it also tied up with with Tata Housing to sell properties via the web. It is expanding categories rather aggressively: a hotel and catering supplies vertical, acquiring the fashion and lifestyle product discovery platform Doozton.
Softbank has been fairly active in India. It recently formed a joint venture with Hollywood studio Legendary Entertainment, focused on digital content in India and China. Its $250 million investment in Legendary Entertainment is expcted to close this month, with former Google exec Nikesh Arora joining the company board. Bharti Enterprises, which runs Airtel, had formed a mobile internet joint venture with SoftBank called Bharti Softbank (BSB) in October 2011. This venture currently operates three mobile ventures including mobile messaging app Hike, mobile gaming venture Tiny Mogul Games and location-based deals service Hoppr. Arora, while at Google, was also on Airtel’s board from 2008 to March 2014. Brightstar, of which Softbank is the largest shareholder, picked up a majority stake in Bharti owned Beetel in July this year. Arora joined Softbank as the CEO of SoftBank Internet and Media Inc (SIMI) and Vice President of Softbank Corporation in July this year.