Techcircle.vccircle.com reports that two people directly aware of the development said that Snapdeal is open to a merger with either Flipkart or Amazon and that the move is at an exploratory stage.
A third person said Snapdeal co-founder Kunal Bahl had met with top executives of Tiger Global Management, the US-based hedge fund and investor in Flipkart, supposedly to discuss the issue.
However, both Flipkart and Snapdeal, run by Jasper Infotech, have denied holding any talks.
A Snapdeal spokesman said the company has had no such discussions with anybody at any point in time. Tiger Global said the firm had no comment to offer and Amazon didn’t respond to techcircle’s request to comment.
According to the source, Snapdeal reaching out to rivals is being seen as a likely effect of the top-level change at SoftBank Group Corp, one of Japan’s largest telecommunications and Internet companies and investor in the Indian ecommerce company.
SoftBank holds a significant minority stake in Snapdeal. It had led a round of USD 500 million last year. In total, Snapdeal has raised around USD 1.65 billion from about two dozen investors. These include SoftBank and SoftBank-backed Chinese ecommerce company Alibaba, Taiwanese contract electronics manufacturer Foxconn, global online marketplace eBay, Indian media company Bennett Coleman & Co, and venture capital investors such as Bessemer Venture Partners, Intel Capital, Iron Pillar, Kalaari Capital and Ratan Tata.
In March of this year, the news broke that Amazon was allegedly involved in talks over a potential acquisition of the Indian e-tailer Flipkart back in 2015.
On the other hand, Alibaba already has a stake in Snapdeal and mobile wallet and ecommerce firm Paytm but is stepping up efforts to establish a direct presence in Indian e-tailing market. In February this year, Alibaba Group, started looking to acquire stake in Flipkart, an Indian online retailer, in order to boost its presence in the local market.
Flipkart has so far raised around USD 3.2 billion and Tiger Global is its lead investor. Tiger Global first invested in Flipkart in 2009 and is estimated to have put in around USD 1 billion in the company.
In recent developments, Snapdeal has shut down Exclusively.com, a marketplace for premium branded fashion and lifestyle products, about 18 months after acquiring the startup. Separately, it has been in talks with several investors, including Foxconn, to sell a stake in its payments unit FreeCharge. Snapdeal had acquired FreeCharge in early 2015.
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