Indian e-commerce player Snapdeal is looking to raise $400 million from an initial public offering (IPO) at a valuation of about $2.5 billion, Bloomberg reported on Friday citing sources.
The company, which counts SoftBank Group Corp. among its investors, has begun talking to advisors about a potential listing in Mumbai as soon as next year, the report said.
The development comes at a time when a bigger player in the space, the Walmart-owned Flipkart, is reportedly weighing an IPO in the US around the fourth quarter this year. In July, Flipkart had raised $3.6 billion led by Canada Pension Plan Investment Board (CPPIB), the Singapore government’s sovereign wealth fund GIC, SoftBank Vision Fund 2, and Walmart.
Kunal Bahl- and Rohit Bansal-founded Snapdeal was among the top e-commerce startups in India, along with Flipkart and Amazon, till about a few years ago. But the company could not keep pace with the competition and consumers’ expectation and thereby was forced to cut down on workforce to keep its bottomline intact. It also spent heavily on acquisitions in 2015 and 2016, which resulted in depleting cash reserves.
In 2017, the Gurugram-based company also called off a potential merger with Flipkart over valuation issues, and decided to take a solo route by tweaking its business model.
The company later came up with an alternative plan called Snapdeal 2.0 that was devised to chart out another growth path that was meant to see a ‘leaner Snapdeal’ operating a platform connecting buyers and sellers, sans additional services such as logistics.
In 2019, Piramal Group executive director Anand Piramal made an undisclosed investment in Spandeal.
Founded in 2010, it offers more than 60 million products across 800 categories on its platform and delivers to more than 6,000 cities and towns across the country, according to its website.