MUMBAI/Taipei – China’s Alibaba Group Holding, Japan’s SoftBank Group Corp and Foxconn will lead an investment of $US500million ($F1067m) in India’s Snapdeal, the online marketplace said on Tuesday, as it seeks to expand in the country’s fast growing ecommerce sector.
The move is a vote of confidence from three of the world’s biggest technology companies in Snapdeal, which in October got a $US627m ($F1338m) investment from SoftBank, also an early backer of Alibaba.
Snapdeal, which bills itself as India’s version of Alibaba, did not break out individual investments. EBay Inc, an early backer of the company, is selling part of its stake in a transaction which also involves fresh funding.
Existing investors Temasek, BlackRock, Myriad and Premji Invest also participated in the funding round, Snapdeal said, without giving further details.
EBay said in a statement it has sold a portion of its stake and would focus on boosting its own business in the country.
Separately, FIH Mobile, a unit of Taiwan’s Foxconn, the trading name of Hon Hai Precision Industry Co, said it was buying a 4.27 per cent stake in Snapdeal for $US200m ($F427.08m) via its Singapore-based subsidiary Wonderful Stars Pte. Sources told Reuters this month that the transaction would value Snapdeal at more than $US5billion ($F10.67b).
In India, Snapdeal rivals Flipkart, valued at around $US15b ($F32b), and Amazon.com Inc’s India unit as the three fight it out for a share of a $US22b ($F46.97b) market.
Like its rivals, Snapdeal sees the majority of its transactions on smartphones and mobile devices.
Alibaba and eBay are also looking to benefit from India’s fast growing online sector, boosted by a rise in use of affordable smartphones and internet connections.
