Japan’s SoftBank is believed to have moved a step closer to securing the consent of co- investor Nexus Venture Partners (NVP) for selling Snapdeal to India’s largest e-commerce firm Flipkart.
A meeting was held on Wednesday and the impasse over the sale could end soon, people familiar with the matter said.
SoftBank — the largest shareholder in Snapdeal — has been making all efforts to get NVP on board for the sale of Snapdeal, and a breakthrough could come as early as this week, according to a report by news agency PTI.
While attempts have been going on for the past few weeks, NVP finally seems to be warming up to the idea, according to Softbank.
A board meeting is expected to take place tomorrow to deliberate upon the issue. A ‘yes’ from NVP is crucial for the deal to go through.
The seven-member board of Jasper Infotech (which operates Snapdeal) includes representation from investors SoftBank, Kalaari Capital and NVP, as well as co-founders Kunal Bahl and Rohit Bansal.
NVP and Kalaari were early stage investors in Snapdeal.
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.
Sources had highlighted that valuation has been one of the hurdles in the deal, as Kalaari Capital and Nexus were not in agreement with the valuation given by SoftBank.
However, that could change soon after NVP’s approval. Kalaari has already given its nod to the proposed arrangement.
Snapdeal was valued at USD 6.5 billion in its last funding round in February 2016. The valuation, however, has shrunk since then and the potential deal could be struck at a discounted rate.
Indian e-commerce companies have seen funding dry up over the last few months as investors are focussing 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.