Japan-based telecommunications company SoftBank is set to invest $627m in India-based e-commerce company Snapdeal as part of a $10bn investment plan.
A source told Reuters that SoftBank is acquiring a stake of around 30% in Snapdeal, which is valued at about $2bn, and will become the company’s largest external shareholder.
“I strongly believe that Snapdeal has the potential to be like the Alibaba of India.,” SoftBank CEO Masayoshi Son said in an interview on Indian television channel CNBC, referencing the China-based e-commerce giant in which SoftBank holds a stake of just over 30%.
The funding was announced alongside another substantial Indian deal, a $210m investment in car rental and taxi service aggregator Olacabs. SoftBank is reportedly also set to make a third big investment, in mobile payment platform Paytm, and is planning to invest up to $10bn in e-commerce over the next decade.
Snapdeal initially emerged as a daily deals site in 2010 but has seen more success since it transitioned into an online e-commerce marketplace for consumer goods.
The company has now raised approximately $1.04bn in funding, with earlier investors including e-commerce company Ebay, semiconductor producer Intel, internet company Ru-net, Saama Capital, Nexus Venture Partners, Kallari Capital, Bessemer Venture Partners, Myriad, Tybourne, PremjiInvest, Black Rock and Temasek.
Kunil Bahl, Snapdeal’s CEO, said the cash will largely be invested in technology, with $250m set to be committed in 2015. Part of that sum will be spent on three or four acquisitions in the mobile technology space.
Snapdeal is also preparing to hire around 500 engineers as it prepares to open a new innovation centre in Bangalore.