Snapdeal, has raised an additional $627 million from SoftBank Internet and Media to continue building out its business in the country, both organically and through acquisitions. It’s thought to be the biggest check ever written by a single investor for an Indian tech startup, and it brings the total raised by Snapdeal in 2014 alone to nearly $1 billion.
The investment comes on the same day that SoftBank is also confirming a $210 million investment in another Indian startup, Olacabs.
For SoftBank, it’s a strategic investment, made to capitalise on the rapid growth for e-commerce in India, but also to link up and “leverage synergies” between Snapdeal and Softbank’s bigger portfolio of companies. That porfolio includes recent additions like Tokopedia (announced just last week), as well as more high-profile, legacy holdings like Alibaba (SB’s share has been described as one of the “greatest ever” investments made, with its $20 million stake now valued at around $75 billion). It also includes companies in India such as mobile ad startup InMobi and the carrier Softbank Bharti.
“We had a lot of demand from investors,” Snapdeal CEO and co-founder Kunal Bahl said in an interview. “We were very clear that SoftBank was the partner that we wanted. We wanted a partner with a long horizon and SB demonstrated that with Alibaba, which went public 16 years after they invested. This was a real meeting of the minds and a deep philosophical investment.”
Bahl was mum on Alibaba as a possible investor, he was not shy to sing the Chinese company’s praises: “Snapdeal’s business model and traction and philosophy are similar to what Alibaba has been able to achieve in China,” he says. “Small biusinesses need to be aggregated on a platform and selling nationally to consumers. We’ve been focused on democratising retail in India both for small businesses and consumers.
Bahl is not commenting on Snapdeal’s valuation except to note that it is significantly higher than the $1 billion that it reached in its previous round. From what people were reporting when SoftBank’s investment was still only rumored, the valuation is now closer to $2 billion, although a report in The Times of India puts it to over $3 billion — as it notes that SoftBank’s investment is for a 20-25% stake.