SoftBank, the largest shareholder in Indian e-commerce platform Snapdeal has successfully convinced co-investor Nexus Venture Partners (NVP) for the merger/sale of Snapdeal to India’s largest e-commerce store, Flipkart.
According to various sources, an exclusive term sheet will be signed with Flipkart in the coming days. The current deal has valued Snapdeal for around $1 billion, a massive drop in its value of $6.5 billion from its last funding round in February 2016.
In Snapdeal, SoftBank holds over 30 percent share, while Nexus has about 10 percent share and Kalaari holds 8 percent share. Under the current deal, Nexus will get around 650 crores in cash along with stock in the merged entity. Snapdeal founders who own around 6.5 percent stake in the company would get about Rs 160 crores each. But they have not been offered any stake in the new entity. Finally Kalaari Capital would get around $70 million.
Flipkart to acquire/merge with Snapdeal
- SoftBank gets the final nod from co-investor NVP for the sale.
- Flipkart to soon sign the term sheet and start due diligence to acquire Snapdeal.
- Snapdeal valuation dropped to $1 billion from $6.5 billion.
Once the deal between Flipkart and Snapdeal gets through, would mark one of India’s biggest acquisition in the e-commerce space. This will also position Flipkart against the increasing threat from heavy funded Amazon India.
Flipkart has been preparing itself to fight against its biggest competitor Amazon. The e-commerce firm has recently acquired the India business unit of eBay or eBay India. During the recent funding round, it raised a total of $1.4 billion from Tencent, eBay and Microsoft. Other than that in the recent time Flipkart has also acquired Jabong and Myntra.