Tuesday 28 October 2014

E-comm buzz: Amazon to buy Indian start-up; Snapdeal gets $627 mn from SoftBank

E-comm buzz: Amazon to buy Indian start-up; Snapdeal gets $627 mn from SoftBank

The battle for leadership position of the fast-growing Indian online retail industry just got more intense.

While E-Commerce giant Amazon is all set to make its first investment in an Indian startup by picking up a minority 20 percent stake in gift card technology and retail firm QwikCilver Solutions, Japanese telecom and media group SoftBank has agreed to buy a $627 million stake in Snapdeal.
"The valuation will be about two to three times the projected net income plus a premium of about 20% as this is a strategic investment," The Economic Times reported today, quoting an investment banker. The report added that QwikCilver, which also provides gift cards and prepaid stored value card solutions, aims to reach Rs 1,000 crore in overall transactions this fiscal.

In order to emerge on top, online retailers will have to look at investing in or acquiring companies that have a potential to scale. During the Big Billion Day, Flipkart sold 20 lakh products worth about $100 million (over Rs 600 crore). Rivals Snapdeal and Amazon have been equally impressive.
Highlighting India as a new priority in its aggressive expansion, SoftBank said on Tuesday it's also leading a $210 million round of investment in an Indian logistics business in a separate deal. The cash-rich Japanese company made waves with its plans to grow outside its home base last year when it bought No. 3 US mobile carrier Sprint Corp for $21.6 billion.

SoftBank said it will become New Delhi-based Snapdeal's biggest investor.

The investment in Snapdeal is the largest in India's growing e-commerce sector since industry leader Flipkart raised $1 billion in July and Amazon said it would invest $2 billion in India. Snapdeal has more than 25 million registered users and more than 50,000 business sellers, according to a statement by SoftBank.

No comments:

Post a Comment