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Ecommerce

Snapdeal, Flipkart merger talks fall through

Wednesday 2 August 2017 | 10:56 AM CET

Snapdeal has refused a merger deal put forward by Flipkart and the company will pursue a solo strategy.

Flipkart offered USD 950 million for the takeover of ecommerce platform Snapdeal, but plans for a deal were abandoned because the two companies disagreed on valuation. Snapdeal officials have said that the company will go through a revamp and pursue a solo strategy.

The company’s valuation plunged from a peak of about USD 6.5 billion in February 2016 to about USD 1 billion during the latest round of discussions. The decision to continue independently shortly after Snapdeal agreed to sell its digital payment platform, FreeCharge, to Axis Bank.

Japan-based SoftBank, which holds about 35% of the ecommerce platform’s stock, supported the decision to go independently. Snapdeal’s representatives have stated that the funds from major and minor investors as well as the funds received from selling its mobile platform will help them develop the company into what they call, “Snapdeal 2.0”. 

The Indian ecommerce market is currently dominated by US-based Amazon and local ecommerce platform Flipkart. Both companies have made strong investments into the region building up their infrastructure, marketing strategies and making their services accessible to more merchants.

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