This letter from the Snapdeal founders all but confirms the sale rumors.
It’s no secret that Snapdeal has had a difficult year, with multiple lay offs, and top executive shuffles, among other things. Also the rumors that the tough year may lead to a sale of the company to Flipkart, a deal which will be pushed by SoftBank, has not been particularly hidden either. However, the fact that these were still believed to be rumors, and Snapdeal also ‘categorically denied’ any such takeover moves, always left a big question mark on the company’s future. But now, in a letter sent out to the employees by Snapdeal founders, all but confirms the sale.
In a letter sent out on Sunday by Snapdeal founders Kunal Bahl and Rohit Bansal, the two consoled their employees for the cloud of uncertainty around the company, and assured that the well being of the employees was Snapdeal’s top priority. The founders ensured that whatever is decided of the company’s future, they are working with their investors to ensure that there is “no disruption in employment.”
The founders also reassured the employees that regardless of the expected takeover, all eligible employees will be receiving their revised salary and promotion letters in next two weeks. They added that overall increments will be higher than those offered in 2016, because of the “incredible progress” that the company has made, which is an interesting choice of words considering the alleged impending sale of the company.
“Dear Team,
There has been a lot of media reporting and speculation around Snapdeal recently.
While our investors are driving the discussions around the way forward, I am reaching out to let you know that the well-being of the entire team is mine and Rohit’s top and only priority. We will do all that we can, and more, in working with our investors to ensure that there is no disruption in employment and that there are positive professional as well as financial outcomes for the team as the way forward becomes clear. Let me repeat, your well-being is our #1 priority.
In the interim, the annual performance review process is nearly complete and you will the receive the salary revision and promotion letters (where applicable) over the next two weeks. Given the incredible progress we have made around our profitability journey as a company, the overall increments this year are higher than those offered last year.
Please do feel free to reach out with your suggestions and concerns. Stay awesome!
Thanks!
Kunal & Rohit”
If the speculations do turn out to be true, Snapdeal will be acquired by India’s largest e-commerce company, Flipkart. Last week, ET reported that Japan’s Softbank, which is the largest shareholder of Snapdeal, held a meeting with Flipkart for the proposed sale of the company. Reportedly, SoftBank put forth terms that Snapdeal shareholders will get one share in Flipkart for every ten they own. Other early investors of Snapdeal, like Kalaari Capital and Nexus Venture Partners, also asked for about $100 million each from the sale. ALSO READ: Snapdeal sale to Flipkart on cards again, but board yet to be convinced: Report
SoftBank has more than 30 percent stake in Snapdeal, which drew valuation at $6.5 billion in 2016. And if the deal comes through, the sale could see SoftBank pick up around 20 percent stake in Flipkart for about $1.5 billion. Few weeks ago, some media reports also alleged that Snapdeal was in preliminary talks with two of its biggest rivals Alibaba-backed Paytm E-Commerce Pvt Ltd, and Flipkart India for a potential sale. However, in a response to BGR India, Snapdeal had denied any such discussion. RELATED: Flipkart, Snapdeal in merger talks as competition grows in e-commerce space: Report