Private Equity firm General Atlantic, which was reportedly in talks with e-commerce firm Jasper Infotech Pvt Ltd which runs Snapdeal.com, to raise what is said to be one of the single largest rounds of private investment in an Indian e-commerce company, has dismissed the development.
In an e-mail response to a questionnaire sent by Techcircle.in, Patricia Hedley, managing director of General Atlantic, said the “information is incorrect”.
The deal would have marked General Atlantic’s first investment in an Indian e-commerce venture. Last year, the PE firm was in talks to invest in India’s largest e-commerce firm Flipkart, but talks did not fructify due to differences over valuation.
Although, Flipkart did not disclose it publicly, it was reported that the firm raised over $100 million from existing investors Tiger Global and Accel Partners early this year. Prior to that Flipkart has raised $31 million in three rounds of funding.
According to a report in The Economic Times Snapdeal is out in the market to raise around $80-100 for which it is courting General Atlantic.
Rumours of such talks have been in the grapevine for the past few weeks. Previously, Snapdeal raised $40 million in Series B funding, led by Bessemer Venture Partners, along with existing investors Nexus Venture Partners and Indo-US Venture Partners. This investment came barely six months after it announced a $12 million Series A round in January 2011 from Nexus and Indo-US Venture Partners.
If it does manage to raise close to $100 million, Snapdeal would become the most funded e-commerce venture in India.
The question is what would Snapdeal do with such a huge round of funding (if indeed it is looking at such a fresh funding and the reported amount does not include a secondary component which gives part or full exit to an existing financial investor). Unlike Flipkart, which has an inventory-led e-com business model and its own logistics, Snapdeal is essentially an asset-light marketplace which means a platform for other offline retailers to sell their products. The firm, which was essentially a site selling deal vouchers (read about the multiple-pivots of Snapdeal) and built a huge online traffic from that low margin high volume business, forayed into product selling last October, offering a variety of non-media products. A month back, the company started selling media products like books, music and movies with an intention of going deeper into existing categories. The company claims now it does 20,000 transactions (excluding deals) every day. The e-tailer intends to double the transactions and targets Rs 600 crore in overall business in FY2012.