Snapdeal, India's largest online marketplace that boasts more than 5 milion products, 50,000 merchants and over 25 million members this week received an investment of USD627 million from SoftBank Internet and Media. SoftBank Internet and Media, which is part of the global telecommunications giant SoftBank Group will become the largest investor in the popular ecommerce company.
According to a statement by both companies, SoftBank group's acquisition of a significant stake in Snapdeal is aimed at increasing the group's presence in India, a country with more than 1.2 billion people and potentially one of fastest growing market for ecommerce and mobile commerce. According to Gartner, a leading global research firm, India's eCommerce market is poised to generate revenues of USD6 billion in 2015, up from USD3.5 billion this year, an increase of 70% in just one year. The explosion in mobile internet and the widespread use of mobile smart devices, specifically low-cost smartphones such as China's Xioami, FireFox OS devices and Micromax has given the much needed impetus to drive internet usage across the country, and has pushed the growth in ecommerce and mcommerce as it becomes increasingly convenient for users to conduct simple transactions such as ticket purchases, payment transfers, online booking and online purchases especially for micropayments and purchases from well established retail brands. As at end of last year, India's mobile internet subscribers surpassed 220 million.
Snapdeal which was founded by Kunal Bahl and Rohit Bansal in 2010, saw a 600% growth in the last year on the back of a sharp increase in mobile purchases with 60% of its orders coming from mobile phones. Snapdeal's early investors include BlackRock, Temasek, eBay Inc., Premji Invest, Intel Capital, Bessemer Venture Partners and Ratan Tata. Following SoftBank Group's investment, Nikesh Arora, Vice Chairman of SoftBank Corp. and CEO of SIMI will join the board of Snapdeal.
Masayoshi Son, Chairman and CEO of SoftBank Corp
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
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
Our entire team at Snapdeal is thrilled and honoured to have SoftBank as a strategic partner. With the support of Sonsan 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.
