E-commerce major Snapdeal is in talks with its rivals – Flipkart India and Paytm – for a potential sale, according to three people aware of the development, as per a report by Shrutika Verma and Mihir Dalal in the Mint.
This comes at a time when the company is struggling for a fresh infusion of funds.
The sale talks are being led by SoftBank, which has invested about $900 million of the $2 billion raised by Snapdeal, the report says.
With the talks being at a preliminary stage, SoftBank is expected to put in up to $50 million as bridge money.
The talks with Alibaba-backed Paytm regarding a potential sale are more advanced than with Flipkart, as per the report.
This is not the first time that talks of a potential sale are doing the rounds and especially the possibility of a sale to Paytm, has been around for a year.
Two of the three people with knowledge of the matter said that the price being offered for Snapdeal could be between $1.5 billion and $1.8 billion, which would be the biggest deal in India’s startup ecosystem, if it comes through, the report adds.
A Snapdeal spokesperson though denied that the company is negotiating for a sale or that it has held discussions with Flipkart and Paytm.
“Your information is incorrect and without basis. We are making decisive progress in our journey towards profitability and all our efforts are aligned in this direction,” the spokesperson said in an email, the report adds.
Over the last three to four months, owing to a cash crunch, Snapdeal has retrenched staff, cut discounts and reduced spending on marketing.
Mint had earlier reported that Snapdeal has limited reserves of cash with only about Rs 1,100 to Rs 1,200 crore in its kitty and the company is in dire need of funds.
Snapdeal’s loss rose to Rs 3316 crore for the financial year ended March 31, 2016, the report says.