Early stage investors in Snapdeal have come out in support of the company for its decision to terminate acquisition talks with its rival Flipkart and to continue its operations as an independent entity.
Venture capital firm Nexus Venture Partners, which is an early investor in Snapdeal, has come out in Snapdeal’s support. A board member of the Gurgaon-based company said that it would “continue to partner with the company, to help achieve its goals”.
The member also added that “Nexus, as a long-term Snapdeal shareholder, fully supports the Snapdeal 2.0 journey.” The VC firm owns around 10-11% stake in Snapdeal.
This follows the remarks of Kenneth Glass, the company’s first investor. Kenneth Glass said that he is excited about the company introducing Snapdeal 2.0. In this new strategy, the company will turn into a stripped down version of Snapdeal with far fewer resources and focus on profitability.
In an email statement, Kenneth Glass, an angel investor from the US, said,
Ten years ago, I believed in Kunal and Rohit’s vision to create a successful company in India and was excited to be their very first investor. Today, I’m equally excited about the announcement introducing Snapdeal 2.0 and believe the future for Snapdeal is very bright and I’m thrilled to continue to be on this journey with them.
Such endorsements from the early-stage investors of the company come as a morale booster of sorts for Snapdeal and its founding team, which decided to walk away from merger talks with Flipkart.
However, some other investors, including long-term backer Kalaari Capital, have expressed displeasure over the decision. Vani Kola, MD of Kalaari Capital said, “I maintain my stand that the decision to terminate the deal was not supported by Kalaari and also reiterate that the deal was called off without prior notice to us.”
As per the reports, Snapdeal 2.0 – a strategy which is being pursued by Snapdeal, is likely to see at least 900-1000 employees lose jobs over the next few weeks. Few of the senior employees have already resigned from their job, including heads of technology, product and engineering.