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EXCLUSIVE: Snapdeal's investor looks for partial exit ahead of IPO; secondary round to fetch around $50M

The company which is targeting a $400 million IPO at a valuation of $2-2.5 billion has also appointed Bank of America besides Axis Bank and JM Financial for the public listing.

September 14, 2021 / 01:40 PM IST
Kunal Bahl, co-founder of Indian online marketplace Snapdeal, gestures as he addresses the media during news conference in New Delhi, India, July 15, 2015. REUTERS/Anindito Mukherjee - RTX1KDB4

Kunal Bahl, co-founder of Indian online marketplace Snapdeal, gestures as he addresses the media during news conference in New Delhi, India, July 15, 2015. REUTERS/Anindito Mukherjee - RTX1KDB4


One of the existing investors of IPO-bound Snapdeal is exploring a secondary transaction for a partial exit from the company which could be valued at $30-50 million, according to sources privy to the development.


Bank of America is scouting for investors for this round, the sources added.


Besides Softbank, Snapdeal counts Nexus, Alibaba, eBay, and BlackRock among some of the top investors on its cap table.


Moneycontrol couldn't immediately ascertain the name of the investor looking to exit.




The company which is targeting a $400 million IPO at a valuation of $2-2.5 billion has also appointed Bank of America besides Axis Bank and JM Financial for the public listing.


The transaction is at an early stage.




"The company has no plans to do a primary round right now. However because there is momentum in the company stock, secondary rounds are being explored. There seems to be a major FOMO (fear of missing out) of getting into Indian tech stocks. This may be working in favour of the company," one of the sources quoted above told Moneycontrol requesting anonymity.


The Bank of America declined to comment.






In 2017, Snapdeal explored a much talked about merger with larger rival Flipkart. However, after a lot of back and forth it decided to go solo following a disagreement over the valuation offered on the table terminating all talks for a distress sale.


The bullishness came from the fact that it had managed to sell off its payments unit Freecharge to private lender Axis Bank for Rs 385 crore just a few days ago. The deal gave Snapdeal a much-needed cash breather for survival.


Currently, Snapdeal is focusing on the value e-commerce landscape which according to a recent report is expected to grow 10X in 10 years.


Its target has shifted to value-conscious buyers especially those belonging to Tier 2, 3, 4 cities and smaller towns. It draws around 80% of its business from non-metro users and is strong in fashion and home categories which account for a large part of the spending in budget-conscious Indian households.


Considering the focus, it recently also added 130 new logistics hubs to cater to the demand from small-town locations.



The value lifestyle e-commerce segment is expected to grow from $4 billion in 2019 to $20 billion in 2026 and $40 billion in 2030, says the report issued by global management consultancy Kearney.


Snapdeal did not respond to a media query.
Priyanka Sahay
first published: Sep 14, 2021 10:53 am

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