Softbank has invested a whopping $627 million (approximately Rs 3,845 crore) in Snapdeal, Techcrunch reports. This brings the total funding raised by the Indian e-commerce player in 2014 alone to $1 billion, bringing it at par with rival Flipkart, which too raised $1 billion earlier this year. Apart from Snapdeal, Softbank is also reported to have invested $210 million in Olacabs, a taxi service that competes with Uber.
Snapdeal co-founder and CEO, Kunal Bahl, has revealed that there are other investors in the current round on top of Softbank’s $627 million but did not reveal details. Snapdeal’s existing investors include eBay Inc, Temasek Holdings, BlackRock, PremjiInvest, and Ratan Tata, the former chairman of the Tata conglomerate.
“We had a lot of demand from investors. We were very clear that SoftBank was the partner that we wanted. We wanted a partner with a long horizon and SB demonstrated that with Alibaba, which went public 16 years after they invested. This was a real meeting of the minds and a deep philosophical investment,” he told the publication.
UPDATE: Snapdeal has revealed that Softbank’s Nikesh Arora will sit on the company’s board. Snapdeal will use the funds to ramp up its supply chain and technology efforts. It will increase its technology team size to 1,000 by the end of this financial year. It will also set up more innovation centres in cities like Pune and Hyderabad, which will add to existing centres in Delhi and Bangalore. It will also increase its fulfilment centres to 30 cities, Snapdeal currently has 40 fulfilment centres in 15 cities. The company also announced it will make three-four investments in the mobile technology space, from where it expects most of its users to come.
UPDATE 2: Olacabs has announced it has raised $210 million in Series D round of funding led by Softbank and existing investors, Tiger Global, Matrix Partners India and Standview Capital. The company will use these funds to expand into more Indian cities. Olacabs already operates in 19 cities in India and claims to have over 33,000 cabs available to hire from its mobile app.
The press releases follow.
SOFTBANK GROUP TO INVEST $627 MILLION IN SNAPDEAL, INDIA’S LARGEST ONLINE MARKETPLACE
New Delhi, India, and San Carlos, CA, October 28, 2014 – SoftBank Internet and Media, Inc. (“SIMI”) and Snapdeal today announced definitive agreements under which the SoftBank Group (further described below) will become the largest investor in Snapdeal, through a total investment of $627 million.
Snapdeal, founded in 2010, has become the fastest growing and largest online marketplace in India, with more than 25 million registered users and more than 50,000 business sellers. Through this strategic investment and partnership with Snapdeal, the SoftBank Group aims to further strengthen its presence in India and leverage synergies with its network of Internet companies around the world.
Masayoshi Son, Chairman and CEO of SoftBank Corp. said, “Since SoftBank’s foundation, our mission has been to contribute to people’s lives through the Information Revolution. We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade. As part of this belief, we intend to deploy significant capital in India over the next few years to support development of the market.”
Nikesh Arora, Vice Chairman of SoftBank Corp. and CEO of SIMI said, “India has the third-largest Internet user base in the world, but a relatively small online market currently. This situation means India has, with better, faster and cheaper Internet access, a big growth potential. With today’s announcement SoftBank is contributing to the development of the infrastructure for the digital future of India. We want to support the leaders and entrepreneurs of the digital future; Kunal and Rohit are two such great leaders.”
Kunal Bahl, Co-founder and CEO of Snapdeal said, “Our entire team at Snapdeal is thrilled and honoured to have SoftBank as a strategic partner. With the support of Son-san and Nikesh, we are confident we will further strengthen our promise to consumers and create life changing experiences for 1 million small businesses in India.”
Nikesh Arora will be joining the board of Snapdeal as part of this strategic investment by the SoftBank Group.
Morrison & Foerster LLP acted as legal advisor to SoftBank, with Kochhar & Co. advising SoftBank on India law matters.
Ola to raise Series D funding of $210mn led by SoftBank
Comes in the wake of Ola’s rapid expansion across new cities and categories.
Bangalore, 28th October 2014: Ola(formerly Olacabs), India’s most popular mobile app for cab-booking today confirmed a definitive agreement to raising $210mn (approx. INR 1260 cr.) from SoftBank Internet and Media, Inc. (SMIC) and existing investors, Tiger Global, Matrix Partners India and Steadview Capital. Ola in the last two months has launched operations across 9 new Indian cities taking its overall presence to 19 as well as new and innovative categories across existing cities. Such rapid growth has made Ola, the first choice of transportation across every city of its operation. Ola is the largest and fastest growing cab-booking app with over 33,000 cabs on the mobile app available for customers to book from. This fresh investment led by SoftBank will further propel Ola to be an integral part of India’s transportation ecosystem across newer cities by making available an efficient, reliable and convenient option for users and service providers.
Masayoshi Son, Chairman and CEO of SoftBank Corp. (“SoftBank”) said, “Since SoftBank’s foundation, our mission has been to contribute to people’s lives through the Information Revolution. We believe India is at a turning point in its development and have confidence that India will grow strongly over the next decade. As part of this belief, we intend to deploy significant capital in India over the next few years to support development of the market.”
Bhavish Aggarwal, Co-founder & CEO, Ola said, “We are thrilled with the pace at which we are growing. Ola is at the forefront of the mobile internet revolution in India and Softbank as an investor and a strategic partner with its global network, brings in a lot of relevant experience and knowledge of this domain. We will continue to build towards our vision of transportation as a seamless and ubiquitous service in every corner of the country and focus on the driver ecosystem to enable micro entrepreneurship and skill development at scale.”
Nikesh Arora, Vice Chairman of SoftBank and CEO of SIMI added, “India has the third largest Internet user base in the world, but a relatively small online market currently. This situation means India has, with better, faster and cheaper Internet access, a big growth potential. With today’s announcement SoftBank is contributing to the development of the infrastructure for the digital future of India. We want to support the leaders and entrepreneurs of the digital future; Bhavish is such a great leader.”
Past Funding:
Ola has raised earlier rounds of funding from Tiger Global, Matrix Partners India, Steadview Capitaland Sequoia Capital. The Series D round of $210mn led by SoftBank qualifies as one of the largest fund-raises in the Indian e-commerce and mobile space.