E-commerce company Alibaba has begun talks with India-based e-commerce company Snapdeal over a Rs 62bn ($990m) investment, the Economic Times reported today.
Snapdeal has raised more than $1bn in funding from investors including telecommunications company SoftBank, which paid $627m for a 30% stake in October 2014.
Other backers include e-commerce company Ebay, semiconductor technology provider Intel, Ru-net, Saama Capital, Nexus Venture Partners, Kallari Capital, Bessemer Venture Partners, Myriad, Tybourne, PremjiInvest, Black Rock and Temasek.
Reports last month suggested Snapdeal is seeking $400m from its next funding round, though Alibaba’s purported investment, the China-based company’s first in India, would be substantially larger and would be raised at a valuation of at least $5bn, according to unnamed sources. SoftBank made its investment at a valuation of about $1.9bn.
A source told ET: “Snapdeal has a term sheet from Alibaba, but is not getting the valuation (it) wants.
“On the other hand, private equity firms are making higher offers, so it can likely be a joint investment.”
The negotiations are progressing at a time when, according to investor reports seen by ET, Snapdeal’s losses are set to increase fivefold to $250m for the current fiscal year, but the scramble to rule the e-commerce market of the world’s second most populous nation has led investors to plough money into the sector.