Snapdeal has raised $100 million (Rs 590 crore) from a group of five investors including Azim Premji’s family office, the latest in a flurry of dealmaking in India’s fast-growing online retail space.The investment, the third for the Delhi-based company in the last year, values Snapdeal at $1 billion, a source said, making it the fourth Indian startup to reach the milestone after rival Flipkart, data analytics provider Mu Sigma and mobile advertising network InMobi.Premji Invest was joined in the deal by Temasek, BlackRock, Hong Kong based asset management company Myriad and hedge fund Tybourne, also based in Hong Kong.”This funding is a great validation given how selective these investors are,” said Kunal Bahl, the 31-year-old cofounder and chief executive of Snapdeal.
In February, Snapdeal raised about Rs 830 crore in a round led by eBay. Its financial backers include Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital. The company has so far raised about $340 million.
Snapdeal’s main competitors are Flipkart, the country’s largest online retailer, and Amazon, the world’s largest. The three companies have introduced initiatives like same-day and next-day deliveries within weeks of each other. And the portals are also adopting aggressive pricing strategies with deep discounts across almost all product categories.
India’s online retail sector, which Crisil forecasts will be worth Rs 50,000 crore in the next three years, is attracting large sums of money from domestic and foreign investors. Flipkart, fashion portal Myntra and babycare portal FirstCry are among those that have raised funding in the last year.Premji Invest, particularly, appears to be making a significant commitment to the sector, leading funding in Myntra early this year. The investment arm of the Wipro founder’s family also has investments in retailers Fabindia, Trent, Shoppers Stop and the Future group’s fashion unit.
“We continue to be super aggressive in execution but prudent with how we spend our capital,” said Bahl. The company, which has grown 600% in the past 12 months, aims to reach $1 billion in sales this fiscal.