There has been a spate of reports about the troubles at Indian ecommerce site Snapdeal. Its Japanese investor SoftBank wrote down its investment in November. The company subsequently laid off hundreds of employees and cut back on operations as it struggled to raise funds.
Snapdeal founders Kunal Bahl and Rohit Bansal put up a brave front in a letter to employees, claiming they had a path to profitability in mind with a leaner, reorganized company. Reports appeared, however, of a rift in the board, with the largest stakeholder SoftBank pressing for a distress sale, while earlier investors Kalaari Capital and Nexus Venture Partners held out for a better deal or a bridge round of funding to take Snapdeal to an IPO.
Today, Snapdeal’s board met for a negotiation even as cash is dwindling in the loss-making company.
- Mint, citing anonymous sources familiar with what transpired, reports that the way has been cleared for a sale to either Flipkart or Alibaba-backed Paytm, with SoftBank first buying out the stakes of Kalaari and Nexus and giving a payout to the founders.
The bone of contention is the price. Snapdeal was last valued at US$6.5 billion but Alibaba is unwilling to pay even a billion for it. The best deal may be an all-stock sale to Flipkart at a valuation of US$1 billion.
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