Snapdeal, ran by Jasper Infotech Pvt. Ltd, which has been in a cash crunch since a few months has surprisingly received a funding of Rs 113 Crore (about $17 million) from existing investor Nexus Venture Partners and the company’s co-founders Kunal Bahl and Rohit Bansal.
The documents which were drafted on Monday revealed that Nexus gushed over Rs. 96 Crore in March. Co-founders Kunal Bahl and Rohit Bansal also raised Rs. 8.5 crore each. The documents also show that Kunal Bahl and Rohit Bansal were granted 1,300 Series J preference shares whereas Nexus was assigned 14, 810 preference shares.
Japanese giant investor, Softbank recently revealed in its annual report a valuation loss of around $1.4 billion on its two iconic investments in India, online transportation network company Ola and E-Commerce marketplace Snapdeal.
The funding is seen at a crucial time when Flipkart, India’s largest E-commerce market place signed a term sheet to acquire Snapdeal. Flipkart has planned to undertake commercial and financial custody of Snapdeal in a next few days. The investment may give the failing online marketplace a supplemental period to nourish itself.
Initial investment by Nexus in Snapdeal was done by its Nexus India Direct Investments II fund in 2011. Between 2011 and 2014, Nexus invested around Rs. 210 Crore in Snapdeal, with a stake of around 10%.
It was revealed in March that Snapdeal only had around 100 million USD in its Bank by the end of December 2016 and the money was dwindling at an astonishing rate day by day.
There have been many board-room battles between the company’s of the pilot investors, Nexus Venture Partners and the largest stake holder, Internet colossus SoftBank Group Corp. The latest funding comes as a major surprise ahead of the company planning a merger with Flipkart due to inadequacy of funds from the investors.
Filpkart, the only persistent competitor to Alibaba and Amazon has recently nurtured for itself $1.4 billion from Tencent, eBay and Microsoft. With the Flipkart-Snapdeal merger, Softbank has also shown an interest in investing in them.
Softbank would try to recover the losses it has experienced and boost its valuation by partially buying out Tiger Global’s share in Flipkart post the merger.
However, a clear speculation has not yet been received regarding how the funding will be used by Snapdeal.