Softbank gets Nexus’ nod for selling Snapdeal to Flipkart

New Delhi, May 11 

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Japan’s SoftBank has secured the crucial nod from co-investor Nexus Venture Partners (NVP) for the sale of Snapdeal to India’s largest e-commerce firm, Flipkart, sources said.

SoftBank — the largest shareholder in Snapdeal — had secured a go-ahead from the founders and Kalaari Capital last month.

However, NVP was not in agreement over the valuation suggested by the Japanese firm and hectic parleys were held in the past few weeks to resolve the impasse.

According to people familiar with the matter, SoftBank Group has now reached an agreement with NVP to move ahead with the sale plan.

They said the term sheet with Flipkart could be signed within this week and the due diligence for the deal would commence immediately thereafter.

Sources said Snapdeal founders would get about $25 million each, while NVP could get close to $100 million and stake in the merged/new entity. Kalaari could get about $70-80 million.

Emails sent to Snapdeal, SoftBank, NVP and Kalaari did not elicit any response.

Snapdeal was valued at $6.5 billion in its last funding round in February 2016. The valuation, however, has shrunk since then and the potential deal could see Snapdeal being valued at about $1 billion, said market watchers.

SoftBank yesterday said it suffered a loss of $1 billion (Rs 6,500 crore) on its investment in Snapdeal during 2016-17, almost matching the money it put in the home-grown marketplace.

As per regulatory filings, SoftBank currently owns over 30% in Snapdeal, while Nexus has roughly a 10% stake and Kalaari holds 8% share in the firm.

The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space and change the landscape of the sector that is witnessing intense competition among players.

Indian e-commerce companies have seen funding dry up over the last few months as investors are focusing extensively on profitability and rationalisation of expenses.

With intense competition from deep-pocketed global rivals like Amazon, companies like Flipkart and Snapdeal could face more heat in the coming days.

There have been reports that Snapdeal’s mobile wallet service Freecharge could be sold separately with players like Paytm and MobiKwik being in the fray. — PTI 

‘Unbox Dhamaka Sale’ 

Before its own possible sale to rival Flipkart, e-commerce firm Snapdeal has announced its ‘Unbox Dhamaka Sale’ offering customers huge discounts and attractive deals

In its two-day mega sale on May 11–12, Snapdeal will offer up to 70% discount on categories, including home, fashion and electronics 

Biggest buyout in Indian e-commerce space

• Japan’s SoftBank — the largest shareholder in Snapdeal — had secured a go-ahead from Snapdeal founders and Kalaari Capital last month
• The term sheet with Flipkart could be signed within this week and the due diligence for the deal would commence immediately thereafter
• Snapdeal founders would get about $25 million each, while Nexus could get close to $100 million and stake in the merged/new entity. Kalaari could get about $70-80 million
• SoftBank currently owns over 30% in Snapdeal, while Nexus has roughly a 10% stake and Kalaari holds 8% share in the firm
• The deal between Snapdeal and Flipkart, if completed, would mark the biggest acquisition in the Indian e-commerce space