Ratan Tata To Invest In Snapdeal; Joins E-Commerce Boom
Only a week after Flipkart raised $1 billion in funding and Amazon announced to invest $2 billion in its Indian business, and now Tata Sons’ Chairman Ratan Tata is reportedly making an investment in yet another e-commerce player Snapdeal. According to a TOI report, Ratan Tata is likely to buy out an early investor in Snapdeal through a secondary sale. While it did not elaborate on the size of the deal, it is likely that the deal would help Snapdeal take a step ahead in the already burgeoning e-commerce segment in India, which is currently dominated by Flipkart and Amazon.
As Tata takes interest in this investment, joining the country’s e-commerce bandwagon, Snapdeal will also be in the race with Flipkart to keep Amazon at bay, whose entry has affected the company’s domestic market significantly.
Snapdeal, founded by Kunal Bahl and schoolmate, Rohit Bansal, four years ago as a daily deals site that later changed it into an online marketplace, was also in the news recently for eyeing to raise $300 million in PE funding. The company has already been funded twice this year, with a total of $233 million funds raised in both the fund raisings. It is now valued at over $1 billion.
Today every business tycoon is looking at the e-commerce pie for growth. Infosys co-founder Narayana Murthy recently formed an e-commerce joint venture with Amazon through his private investment firm Catamaran Ventures. Offline retail giants like Mukesh Ambani’s Reliance Retail and the Aditya Birla Group have also unveiled their e-commerce plans as an increasing number of Indians shop online, driven by rising smartphone penetration.
The e-commerce industry is India is growing at a superfast pace. According to a joint report by KPMG and Internet and Mobile Association of India (IMAI), India’s e-commerce industry, which is around $13 billion at present is only going to grow further in the coming years, with market experts claiming that the industry is going to touch $70 billion by 2020.
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