Internet and telecom firm SoftBank has withdrawn an amount of debt financing sized between $150m and $200m to India-based e-commerce platform and portfolio company Snapdeal, the Economic Times reported yesterday.
Snapdeal runs a diversified online retail portal that lists more than 35 million products across more than 800 categories.
The company has raised about $1.7bn in funding from backers also including media group Bennett Coleman & Co, e-commerce firms Alibaba and eBay, manufacturing services provider Foxconn, mobile software producer Myriad and chipmaker Intel.
The decision was made days after reports began circulating that Snapdeal could merge with another Indian e-commerce company, Flipkart. It has reportedly stirred up friction between SoftBank and two other notable Snapdeal backers, Kalaari Capital and Nexus Venture Partners.
SoftBank has invested a total of about $900m in Snapdeal, which was valued at $6.5bn to $7bn as of February 2016, and owns a stake sized at about 33%, while Nexus holds 10% and Kalaari, which invested $27.5m before selling part of its stake to SoftBank in 2014, owns 8%.
SoftBank holds two seats on Snapdeal’s seven-person board of directors while Kalaari and Nexus have one each, and the corporate has reportedly been leading prospective merger discussions without informing other board members.
An undisclosed source told ET: “There was a term-sheet offering Snapdeal debt financing for a period of three years, which was inexplicably withdrawn within days, giving credence that SoftBank has made up its mind about selling the company.”
Flipkart recently closed $1bn in funding and the potential all-share deal SoftBank is exploring would involve it buying $1bn of Flipkart stock from hedge fund manager Tiger Global Management, two people aware of the matter told ET.