eBay Ups Stake In Snapdeal To Gain Ground In India
eBay has infused another round of investment of $133.77 million in Snapdeal, raising its stake in the company following an initial investment made in 2013. The company had first invested $50 million in Snapdeal last year around April.
eBay’s first round of investment, which coincided with Amazon’s launch of its website in India, had spurred many speculations about eBay’s move at that time. Market analysts believe that this is in sync with the growing interest of global e-tailers in India’s growing e-commerce market. With arch rival Amazon launching in India, eBay couldn’t have been left behind.
“Accelerating growth in India and other emerging markets continues to be a core strategy for driving eBay’s global e-commerce leadership. eBay is excited about the prospects ahead for both Snapdeal and the eBay India business,” says eBay Senior Vice President and APAC Managing Director Jay Lee. “We continue to invest in Snapdeal due to its complementary business model, good management team and strong brand.”
“eBay’s partnership with Snapdeal will benefit Indian businesses of all sizes, consumers and local commerce,” says Latif Nathani, Managing Director, eBay India.
“We see eBay’s second round of investment in Snapdeal as an endorsement of our strategy and progress. All our current institutional investors including Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital have participated in this round as well which is a strong endorsement of our team” said Snapdeal Co-founder and CEO Kunal Bahl.
According to a report published in Live Mint, eBay is seeking to forge a meaningful presence in a country where it has struggled despite being an early mover and where its global rival Amazon is expanding rapidly. “eBay may eventually buy Snapdeal, seeing an acquisition as the company’s best, and probably the only, chance of building a large online presence in India. India doesn’t allow foreign direct investment in online retail, but it allows it in online marketplaces; that’s why most Indian e-commerce firms are structured as marketplaces,” said the report.
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