Ratan Tata, former chief of Tata Group and currently chairman emeritus of group’s holding company Tata Sons, has invested an undisclosed amount in Delhi-based Jasper Infotech Pvt Ltd, which runs the online marketplace Snapdeal.com. The investment has been made in his personal capacity.
Snapdeal had raised around $320 million prior to this investment by Tata.
“This is a very proud and exciting moment for the entire Snapdeal family. An investment by a legendary and respected figure like Tata is an excellent validation of our focused strategy on building a long term enterprise and marks the start of a very important phase for the company,” said Kunal Bahl, co-founder and CEO, Snapdeal.com.
Earlier this month, Tata had mentioned that e-commerce is one of the areas where is he looking to personally invest because of its ‘good potential’ as a large proportion of the country’s consuming public do not have the required access to goods. Tata, however, refused to comment specifically about any investments in Snapdeal, as reported by certain section of media earlier.
“I plan to do personal investments and am looking into a variety of areas to do that and e-commerce is one of them. E-retailing today is one of the hottest forms of marketing and has a good potential in the country as 500 to 600 million people of the country are the consuming public,” he had said at the time.
Snapdeal had raised its last round of funding in May this year, securing $100 million (Rs 590 crore) in fresh round of funding from a group of new investors including US-based BlackRock Financial Management, Singapore’s sovereign wealth fund Temasek, Hong Kong-based Myriad Asset Management and Tybourne Capital Management, besides PremjiInvest, the personal investment vehicle of Wipro chairman Azim Premji.
The new funding came barely three months after the e-commerce player raised $133.77 million (Rs 830 crore) led by existing investor eBay Inc with participation from other existing investors Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital, in the third-biggest funding round in an Indian tech firm.
As first reported by Techcircle.in, the company had asked its financial advisor Credit Suisse to scout for $300 million from private investors.
Snapdeal was started as a pure online deals site and later it pivoted to a full-fledged horizontal e-commerce company via a marketplace model in September 2011. It offers over five million products across more than 500 categories. The company claims to have over 25 million members and 50,000 sellers, and is delivering to 5,000+ cities and towns in India. It further claims to have witnessed 600 per cent growth year-on-year for the last two years. The current team size is 1,500 employees.
The company recently launched a new initiative to help sellers on its platform get easy access to working capital to help them expand their business further.
The $3 billion Indian e-commerce market is witnessing aggressive competition from global giants as well as home-grown players. Led by increasing internet penetration and youngsters shopping online, India’s e-commerce market has seen huge growth in the past few years.
Last month, e-commerce giant Amazon said it will invest $2 billion in the country to grow the business in a market that is dominated by home grown players like Flipkart and Snapdeal.
The US-based firm’s announcement came less than 24 hours after rival Flipkart announced raising a whopping $1 billion funding, the largest in the e-commerce space in India and also one of the single biggest funding rounds for a tech venture globally.
Interestingly, Ratan Tata’s investment announcement in Snapdeal comes within a day of Tata Value Homes Limited (TVHL), a privately held property arm of the Tata Group, partnering with Snapdeal allowing consumers to book their flats on the e-commerce firm’s portal.