Priyanka Sahay & Harsimran Julka
Snapdeal co-founders Kunal Bahl and Rohit Bansal are likely to receive USD 30 million in cash each from SoftBank after their exit from the company. The payout is part of the merger of Snapdeal with Flipkart, sources confirmed to Moneycontrol.
SoftBank is likely to invest a large sum in the merged entity, giving the existing stakeholders an exit.
The founders hold less than 6.5 percent stake in Snapdeal, pegging the deal valuation at just about USD 1 billion, almost one-sixth of what it was valued in early 2016.
“The company’s board has reached a consensus and due diligence is likely to take place from next week. Almost all the deal contours have been finalised,” a company official said on condition of anonymity.
The two founders had earned close to Rs 80 crore each from sale of shares during a large funding round led by Ontario Teacher's Pension Plan in 2015.
Moneycontrol on Thursday reported that Snapdeal has agreed to a non-binding letter of intent (LoI) for a merger with rival Flipkart.
The deal, which has been in works for last few months, was stuck due to disagreement amongst stakeholders over final settlement for the company's earliest investors namely Kalaari Capital and Nexus Venture Partners.
Except for few top executives, others are not likely to be retained in the combined entity, said the person quoted above without specifying the exact number. In February, Snapdeal went through a mass retrenchment exercise which saw over 2,300 employees being let go.
Over the last few months, the company has also witnessed massive voluntary attrition.
While the exact number of the employees in the company could not be ascertained, the company's headcount is expected to be below 2,000 people as of now.
There was no immediate clarity on whether or not the existing or former employees who have vested esops in the company would be entitled to any benefit through this deal.
Around 2,500-3,000 current as well as former employees hold close to 5-6 percent stake in Snapdeal in terms of ESOPs.
Since its inception in 2010, the e-commerce firm has raised USD 1.75 billion from investors such as SoftBank, Kalaari Capital, Temasek, Alibaba Group, eBay and others.
It's largest investor SoftBank in a filing this week said that it has incurred a valuation loss of USD 1.4 billion for the financial year 2016-17, mainly on account of its two biggest investments in India — Snapdeal and Ola.