Snapdeal, the e-commerce marketplace which is struggling to keep its business afloat, and which reportedly has two acquisition offers, is now struggling to make decision about the firm’s future.
As per the reports, the company is divided over the proposed sale of the company. Snapdeal has two acquisition offers — one from Flipkart and another from Infibeam.
While the company’s founders are pushing for the Infibeam deal, its largest shareholder — SoftBank, is keen to move ahead with the Flipkart’s proposal. Its noteworthy that SoftBank is the one that pushed Snapdeal for the sale to Flipkart and if the deal goes through, the Japan-based VC firm will invest significant amount in Flipkart, along with partially buying-out Tiger Global’s share.
Kunal Bahl and Rohit Bansal, co-founders of Snapdeal, are more interested in the Infibeam’s offers, mainly because they may retain control of Snapdeal. However, reports also suggests that the they are also looking at a possibility to survive as an independent company by cutting both – a majority of jobs and the size of its business.
Initially, there were talks about Flipkart valuing Snapdeal at around $1 billion. However, when the company submitted its proposal, it valued the New Delhi-based startup at $750 million. The proposal was declined by Snapdeal’s board. Last week, Flipkart submitted another proposal, this time valuing Snapdeal at $850 million.
Meanwhile, Snapdeal’s founders approached Infibeam, the online publicly-listed online retailer in India, to sought acquisition from them. It is believed that Infibeam has made a buyout offer later in the week, valuing the company at around $700 million.
If the acquisition talks fails and the deal doesn’t go through with any of those companies, there’s a possibility that Snapdeal will cut a majority of its current jobs, slash the size of its business and try and survive as an independent firm.
While raising a fresh funding round doesn’t seem possible at time time, the company may be able to raise capital by selling its other businesses. In fact, it has already put up its payments business FreeCharge on sale. The deal, which has the likes of Axis Bank, Airtel and Amazon in the race, is likely to happen by the end of this month.
Snapdeal, which has raised nearly $2 billion in cash, had hit a peak valuation of $6.5 billion in February 2016 when it raised $50 million in a new funding round from investors.