Snapdeal, the struggling e-commerce startup, has reportedly invested ₹152 crore into its logistics arm Vulcan Express. The development was revealed through filings with Registrar of Companies (RoC).
As per the RoC filings, Vulcan Express has issued 152,449,004 equity shares worth of ₹10 each to Snapdeal’s parent company Jasper Infotech.
This funding round comes at a time when its parent company is reportedly trying to sell off Vulcan Express. This new funding round from Snapdeal could mean that it is no longer selling this logistics arm.
Earlier last month, there were reports stating that Snapdeal was looking at a price tag of ₹200 crore for Vulcan. The sale was expected to take place within 30-40 days of raising funding from Snapdeal in July. However, noting materialized and reports suggests that the proposed sale had got a lukewarm response.
Vulcan Express was founded in 2013 as an end-to-end logistics and supply-chain solution for managing Snapdeal’s shipments. At present, the services offered by Vulcan include transportation, warehouse management, line haul, last-minute distribution, quality control, inventory tracking as well as reverse logistics.
In FY16, Vulcan Express posted a huge jump in net revenue to ₹184 crore, up from ₹26.7 crore in FY15. But, losses also widened six-fold to ₹20 crore from ₹43.2 crore in FY15.
Recently, Snapdeal managed to sell FreeCharge to Axis Bank for about ₹385 crore in order to gather money to keep the e-commerce platform running. After walking off from the Flipkart’s acquisition offer, Snapdeal has decided to run independently.
As a part of Snapdeal 2.0 strategy, the company is expected to lay off a chunk of its workforce. Along with that, shedding off its associated entities — FreeCharge, Unicommerce and Vulcan Express was also reportedly part of the strategy.
However, Snapdeal managed to sell just one entity – FreeCharge that too for just a fraction of money than what it paid to acquire the payments firm a few years ago.