India’s second largest local eCommerce company, Snapdeal, has faced growing pressure from other native and international competitors, all of whom vie for a piece of the nation’s fast growing online market.
Recently, Snapdeal CFO Anup Vikal told Reuters that the company is now seeking to raise some $100 million in additional funds from new and existing investors. The hope is to boost Snapdeal’s cash reserves and maintain its course to become profitable in two years.
In February, Snapdeal restructured by laying off between 500 to 600 employees and making cuts to its online payments division FreeCharge as well as its logistics operation Vulcan Express.
Snapdeal’s eCommerce competitors in India significantly outpace it when it comes to overall investments. Flipkart has recently raised $1.5 billion, and Amazon has invested $5 billion in expanding into the India market. Snapdeal has raised only $1.6 billion to date, with its two latest funding rounds, both back in 2016, totaling just over $200 million.
But despite earlier rumors, the company says it is not for sale.
Reports in the month of March suggested that the company was in sale discussions with domestic rivals Paytm E-Commerce and Flipkart. Snapdeal categorically denied that sale discussions took place.
“The information is incorrect and without basis,” wrote a company spokeswoman. “We are making decisive progress in our journey toward profitability, and all our efforts are aligned in this direction.”
Speculation surrounding a possible acquisition continues to swirl as the company seeks investment. Talk that Alibaba would make a play for Snapdeal popped up several times in 2016.
“Snapdeal has been desperately looking to raise money in China for the last few months,” a source claiming direct knowledge of Snapdeal’s plans told Reuters. “It had multiple rounds of talks with some Chinese funds and was also hoping to get some fresh money from Alibaba. But those talks were not going anywhere, and Alibaba made it clear to them they would not write a new check for them given the dim outlook for making money any time soon.”