Indian eCommerce firm Snapdeal is in talks with Chinese eCommerce company Alibaba and iPhone assembler company Foxconn Technology Group to raise $500 million investment.
Alibaba and Foxconn are in talks to invest for a joint 10% stake in the company, taking Snapdeal’s potential valuation to $5 billion (about Rs.32,000 crore). However, the deal still needs regulatory approval in India.
Terry Gou, Foxconn Chairman convinced Jack Ma, Alibaba Executive Chairman, to make a joint investment rather than an individual one, as it would make more sense, as reported by WSJ.
In October 2014, Japanese telecom and internet corporation, Softbank had invested USD 627 million in Snapdeal in order to strengthen its hold in the Indian market.
In March 2015, there were floating speculations regarding Alibaba and Foxconn‘s individual investment in Snapdeal. But eventually, the talks were called off. As reported by Reuters, it would have been Alibaba’s first direct investment in India, had it been finalised.
This new move where Alibaba and Foxconn are in talks of coming together could possibly be to bolster their presence in India. Given certain government regulations obstructing the direct entry of such companies in India, they are making cautious moves by investing in local players to pave their ways into the Indian market. Snapdeal founded in 2010, has raised a total funding of $1.1 billion in 8 rounds from 16 investors till now.