SoftBank expected to invest huge in Snapdeal – Fipkart merger

The Japanese telecom and internet giant, SoftBank is reckoned to invest a huge amount in the merger of its biggest Indian asset Snapdeal with e-commerce giant Flipkart. The SoftBank is said to have cleared the hurdle amidst the Snapdeal – Flipkart merger. The agreement was delayed due to disagreement among the stakeholders over the final settlement for the earliest investors; Nexus Venture Partners and Kalaari Capital.

In this, Snapdeal co-founders Rohit Bansal and Kunal Bahl are likely to receive an amount of $30mn each from SoftBank. The merger also calls for the exit of both the co-founders from the company.

Since 2013, with 33% of shareholding SoftBank has invested around $900mn in Snapdeal . Kalaari Capital and Nexus Venture Partners own around 8% and 10% stakes respectively.

The company has witnessed a steep markdown in deal valuation from $6.5bn in 2016 to $1bn this year. The Letter-of-Intent (LoI) for the all-stock deal will be signed next week and the valuation is likely to be finalized after due diligence and signing of the LoI.

According to PTI report, Snapdeal’s mobile wallet service Freecharge might also get sold to MobiKwik and Paytm. The Snapdeal – Flipkart is being taken as the biggest merger in the Indian e-commerce arena and expected to change the industry landscape in the coming years. Also, giants like Paytm and Amazon will offer much more competition in the market for Snapdeal and Flipkart.

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