Snapdeal looking to raise $100 million from SoftBank, other investors

Vikal said some of Snapdeal's existing investors including SoftBank, its largest backer, were willing to participate in the fundraising.

SoftBank declined to comment on the matter.

India's burgeoning online retail sector is led by home-grown player Flipkart.

Industry sources say that Snapdeal's loss of the No. 2 spot and its lack of profitability mean it will have to raise money at a much lower valuation than the $6.5 billion valuation it enjoyed a year ago after a fund raising led by Canada's Ontario Teachers' Pension Plan.

Snapdeal last raised slightly over $200 million via two separate funding rounds in 2016.

The company's logistics unit Vulcan Express and e-commerce solutions provider Unicommerce will break even in the quarter to June, giving a fillip to its profitability plan, Vikal said.

Snapdeal has cut costs by using automated systems to reduce labor costs, renegotiated vendor contracts and it plans to let go of excess floor space at its headquarters outside New Delhi, Vikal said.

In February, the firm also laid off 600 employees and its founders Kunal Bahl and Rohit Bansal stopped drawing salaries.

The measures and a steep reduction in fulfillment costs have helped the company reduce losses sharply, said Vikal.

Vikal declined to comment on whether Snapdeal could be an acquisition target. Alibaba, according to a source, is in early talks with SoftBank about potentially merging Snapdeal with local rival Paytm.

Speaking about digital payments arm FreeCharge, which sources say Snapdeal is looking to sell, Vikal said the company evaluates any "inbound interest" and some international players had shown interest in becoming partners in the business.