Desperate times call for desperate measures. Snapdeal that’s running out of time and money just got a temporary breather.
The home-grown company’s co-founders Kunal Bahl and Rohit Bansal along with early-stage investor Nexus Venture poured Rs. 113 crore (approximately $17 million) into Jasper Infotech, Snapdeal’s parent company.
According to the Registrar of Companies (RoC) filing, the major chunk of the funds (Rs 96.2 crore) was invested by Nexus and Bahl & Bansal invested Rs 8.45 crore each.
As per few reports, this latest Rs. 113 crore funding would be utilized to meet the marketplace’s day-to-day operational expenses. On the other hand, an insider revealed that the money would be poured into Unicommerce.
Other details of the surprise emergency funding:
- The investment was sanctioned in Extraordinary General Meeting of Snapdeal that was held on 10th March
- In exchange of the investment, the co-founders were allotted 1,300 Series J preference shares and Nexus was given 14, 810 preference shares
What about Flipkart-Snapdeal merger?
The last update on this front was that the term-sheet has been signed and the due diligence to determine Snapdeal’s worth is underway. But it is taking longer than expected, which has left the Indian etailer with little cash reserves.
Cash-crunch compelled Jasper to infuse Rs. 22 crore in its payments arm Freecharge, which is on-sale. Now the co-founders and Nexus had to do the same for Jasper.
The plus side of this is that Bahl, Bansal and the investors would roll in money once Snapdeal and Freecharge get acquired by Flipkart and Paytm, respectively. Because with each investment, their personal stake in the soon-to-be-sold company is increasing.
Meanwhile, Flipkart is getting summer ready
While Snapdeal’s employees, sellers, co-founders, investors and minor stakeholders worry about the looming merger, Flipkart is gearing up for its Summer Shopping festival.
The Indian ecommerce leader just wrapped up its 10th anniversary sale ‘Big 10’. In less than 2 weeks, Flipkart has rolled out its summer sale.
Flipkart’s ‘Summer Shopping Days’ will run till 31st May. The etailer is offering discounts of up to 80% on electronics and auto accessories. Lucrative offers on top brands such as Apple, Adidas, Lenovo, Samsung, Motorola, Micromax, Nikon, Fastrack, and Voltas are up for grabs. The trusted EMI, product exchange and buybacks schemes would also make an appearance, which would help Flipkart to attract first-time buyers.
Flipkart witnessed five-fold increase in its order volume during the Big 10 sale. Let’s see how much would the Summer Shopping sale contributes to its FY 2017-18 Q1 revenue.