Snapdeal gets $50 million funding from eBay, Japan's Recruit Co

BANGALORE: Online retailer Snapdeal has raised a new round of funding led by eBay and Japan's Recruit Co, months after it first began wooing investors. The funding, estimated to be between $30 million and $50 million (Rs 160-270 crore), will mark the first investment in India by Recruit Co, a $10-billion classifieds and human resources company.


eBay, the lead investor, will own less than a tenth of Snapdeal that has been valued at around 1,000 crore, said several people aware of the transaction. Owned by Jasper Innovative Marketing Solutions, Snapdeal last raised money in 2011 at a similar valuation. Existing investors Bessemer Venture, Nexus Venture and Indo-US Venture Partners (now Kalaari Capital) also participated in the deal, marking a cautious revival of interest in an industry that has been battling high operating costs and regulatory concerns.

"This is a top-up round and as committed investors we will continue to support them," said Vani Kola, managing director of Kalaari Capital. eBay and Snapdeal declined to comment and Recruit did not reply to emails. ET was not able to ascertain the quantum of money committed by each of the investors.

This round of funding is half of what Snapdeal set out to raise last year when it was in talks with several investors.

For Recruit, one of the largest privately-held companies in Japan with over 22,000 employees, the deal provides it a toehold in the Indian market. Last year, the company acquired Indeed.com, considered to be amongst the world's most visited jobs sites.

Venky Harinarayan and Anand Rajaraman, who cofounded the US-based internet company Junglee that was bought over by Amazon in 1998, are also investors in the latest deal.

Founded by Kunal Bahl and Rohit Bansal, Snapdeal last raised 200 crore in 2011. The two founders continue to hold a majority stake in the company, according to people close to the transaction.

In the past year the ecommerce industry has been struggling to attract capital, with $326 million invested compared with $346 million in 2011, according to research firm Venture Intelligence. Of this, $150 million went to one company, Flipkart, which raised money from a consortium of investors including the Naspers Group.

"Investors are beginning to reengage, but it will be at least six months or more before we see some form of revival," said Aashish Bhinde, executive director who heads digital media and technology practice at Avendus Capital.

radhika.nair@timesgroup.com