Nearly three years after it last raised funds, e-commerce player Snapdeal is reportedly in talks with investors to raise $100 million. The funds are expected to come from new and existing investors, including SoftBank and the company has reportedly told prospective investors that SoftBank committing to half the round. This means effectively they are looking for someone to come up with $50 million.
According to a report in the Economic Times, Snapdeal is looking at a valuation of anywhere between $800 million to $1.2 billion.
Snapdeal is promoted by Kunal Bahl and Rohit Bansal. The promoters had to revisit their business model in 2017 and switched to promoting more local, unbranded products on their platform. This ensured that there was a larger margin to play around with though volumes were limited.
However, Snapdeal has succeeded in stemming its losses while constantly upping the revenues.
According to the financial figures available, Snapdeal claims it has reduced its losses by 70% to Rs 186 crore by the end of the financial year that closed on March 31, 2019. The revenue has climbed to Rs 925 crore, a 73% increase.
It also moved away from metropolitan cities and to target tier 2 and tier 3 cities. This also helped Snapdeal stay above water.
In fact, the potential that markets beyond metros hold is seen from the fact that the top players in the industry, Amazon and Flipkart, are also focusing on tapping into these markets.
It Snapdeal has appointed Bank of America Merrill Lynch as its adviser for this fund-raising effort.
Snapdeal last raised funds in February 2016, when it was valued at $6.5 billion.