When there are many business initiatives
from other E-commerce giants like Flipkart and Amazon raising more funds in
order to increase its valuation, Snapdeal gets a sigh of relief from SoftBank. Snapdeal
would be getting close to $150 million worth funds from SoftBank in order to
increase the company’s capital valuation for the current financial year
2017-18.
The Delhi-based online E-commerce company
is receiving this huge capital funds from its largest shareholder, SoftBank.
With many other companies like Amazon, Flipkart and Paytm depending on their
big investors to get more funding, Snapdeal will definitely have an advantage
over the other rivals.
This funding is coming at such a crucial
time for Snapdeal as the other companies are suffering from a shortage of
funds. This investment from SoftBank will see Snapdeal grow in a new dimension
altogether.
During February 2016, Snapdeal was on a
peak with reference to the capital valuation as it reached an awesome $7
billion mark as it had received $200 million worth funding from Canada
Teachers’ Pension Plan.
In the same year, the company had to incur
heavy losses amounting Rs.2,969 Crore, while another digital e-wallet company
Freecharge incurred losses worth Rs.270 Crore. The other two companies which
experienced losses were Amazon and Flipkart. According to an online report by
Firstpost, Amazon touched losses up to Rs.3,572 Crore and Flipkart incurred
losses up to Rs.2,306 Crore by the year ending March 2016.
Two years ago, the company’s valuation was
$3 billion and considering the recent sales in the year 2016 and 2017, the
valuation has definitely touched the sky. If the investment decision goes on
well and if the final funding is exercised then the company’s capital will
increase to 40%.
Jasper Infotech which is the parent
organisation of Snapdeal is headquartered in New Delhi. The owners of this
franchise - Rohit Bansal and Kunal Bahl, sent an e-mail to all the employees
mentioning the company’s execution were not up to the mark.
Due to the incorrect execution, there was a
streak of losses incurred by the firm. In a conversation with the Rohit Bansal,
the Co-founder of Snapdeal, he said, “ We are now building new teams to expand
the size of business in the coming months. We are confident that by the year
ending 2017, we will be a larger E-commerce online setup and will continue to
give stiff competition to the other E-commerce players”.
