Tech Crunch reported news that Snapdeal’s board failed to approve the reported $900 to $950 million acquisition. Snapdeal will continue to operate as an independent company.
“Snapdeal has been exploring strategic options over the last several months,” a spokesperson said in a statement. “The company has now decided to pursue an independent path and is terminating all strategic discussions as a result.”
Flipkart was interested in the deal as a way to boost its efforts to battle shopping giant Amazon in the eCommerce market. While it has seen slowing growth, Flipkart appointed new chief executive officer Kalyan Krishnamurthy in January and went on to raise $1.4 billion in funding from eBay, Microsoft and Tencent in April. The company boasts a valuation of $11.6 billion.
There have been news reports that roadblocks put up by Snapdeal killed the negotiations, and Snapdeal founders Kunal Bahl and Rohit Bansal ultimately chose to remain independent. With the backing of two investors, they are looking to run a “stripped down” version of the service, which will probably result in more layoffs for Snapdeal’s 1,000-plus staff. The company let 500 to 600 employees go in February as a cost-cutting measure.
But while Snapdeal will not be bought by Flipkart, it has agreed to trade its FreeCharge mobile and prepaid payment business to Axis Bank for a bargain price of $60 million. The company said in a statement that the sale of FreeCharge and other cost-cutting measures will make Snapdeal “financially self-sustainable” again. Snapdeal was valued as high as $6.5 billion in 2015.
“Snapdeal’s vision has always been to create life-changing experiences for millions of buyers and sellers across India,” the company added in the statement. “We have a new and compelling direction — Snapdeal 2.0 — that uniquely furthers this vision, and have made significant progress towards the ability to execute this by achieving a gross profit this month.”