Snapdeal gets fresh funding from Anand Piramal

Business conglomerate Piramal Group’s Executive Director Anand Piramal has made an undisclosed investment in online marketplace Snapdeal. This development comes just a week after the company announced that its has trimmed its losses significantly for fiscal year 2018-19.

In a press statement, the company said, “Snapdeal’s 2.0 strategy has allowed it to rapidly build a differentiated business, with a sharp focus on value-priced merchandise - the largest segment in retail.”

“Snapdeal’s sharp execution in bringing great selection to the mass market segment in Tier 2 and Tier 3 cities has been quite successful," said Piramal who has invested in his personal capacity. “Since 2017, Snapdeal’s revenues have grown rapidly with profitable unit economics."

Snapdeal, which at its peak was valued at USD 6.5 billion around 2016, had raised funding from giants like SoftBank, Chinese e-commerce giant Alibaba and Canadian pension fund Ontario Teachers Pension Plan (OTPP).

However, it started losing market share to Flipkart and Amazon India as the rivals started pumping in millions of dollars to strengthen their position in the burgeoning Indian e-commerce market.

In 2017, SoftBank tried to orchestrate a merger between Snapdeal and Flipkart. Snapdeal, however, dumped the USD 950-million takeover offer from Flipkart and instead decided to pursue a fresh strategy - Snapdeal 2.0 - in the Indian market.

This strategy has helped Snapdeal narrow down its consolidated losses substantially over the last two years to Rs 186 crore in 2018-19 from Rs 4,647.1 crore in 2016-17.

The company has also been able to grow its revenues to Rs 925.3 crore in the last fiscal as compared to Rs 535.9 crore in 2017-18.

“Anand's investment comes as a significant endorsement for Snapdeal and the transformation the company has undergone over the last couple of years," said Kunal Bahl, Snapdeal’s chief executive.

Snapdeal said that 80% of their users come from small towns and cities. It also claims that the platform has added over 60,000 new sellers in the last two years, who have, in turn, added more than 50 million listings. Snapdeal has more than 500,000 registered sellers with over 200 million listings on the platform.

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