E-commerce firm eBay has written off $61m of its investment in India-based online marketplace Snapdeal, according to its 2017 full-year fiscal report.
Snapdeal operates an e-commerce platform that sells a wide range of consumer items including clothing, electronics and appliances.
Once a competitor with compatriot Flipkart as well as US-based Amazon, the company’s market share fell behind and it was on the verge of being acquired by Flipkart in 2017 before pulling back from the deal in July.
The company had raised a total of about $1.7bn in funding and was valued at between $6.5bn and $7bn in early 2016, but Flipkart’s offer topped out at $950m. The offer illustrated how far Snapdeal’s valuation has fallen, and most of its investors will likely end up making a loss.
EBay led a $50m round for Snapdeal in 2013 that included Bessemer Venture Partners (BVP), Nexus Venture Partners and IndoUS Venture Partners.
The 2013 round was followed by a $134m round the following year that was also led by eBay, with participation from BVP, Nexus, Kalaari Capital, Saama Capital and Intel Capital, the corporate venturing subsidiary of semiconductor technology provider Intel.
The corporate sold part of its stake in Snapdeal in 2016, most likely at the latter’s peak valuation, which would have offset the impairment charges. It also received a 5.4% stake in Flipkart in a 2017 deal that involved it investing $500m and transferring ownership of its eBay India business.
Snapdeal’s other corporate investors are telecommunications company SoftBank, media group Bennett Coleman and Co, e-commerce firm Alibaba, contract manufacturer Foxconn, chipmaker Intel and mobile software provider Myriad.