Foxconn, Alibaba in talks to jointly invest $500-million in Snapdeal: report
17 June 2015
Chinese e-commerce giant Alibaba and Taiwan-based technology supplier Foxconn are reported to be in talks to jointly invest $500 million in Snapdeal, India's second-largest e-commerce firm.
Foxconn Technology Group and Alibaba Group Holding Ltd are currently in talks with Snapdeal, reports quoting people familiar with the development said, adding that no deal has been reached so far.
The $500-million (roughly Rs3,213 crore) investment could take Snapdeal's valuation to roughly $5 billion (about Rs32,100 crore), giving Alibaba and Foxconn a combined stake of 10 per cent.
Reports said talks are at advanced stages, but a deal would still require regulatory approval to proceed.
Snapdeal has already received major investment from foreign investors eBay and SoftBank to the tune of $1 billion, with the company valued at roughly $2 billion last year (See: eBay raises Snapdeal stake for Rs829 crore and SoftBank invests $627 mn in Snapdeal).
A Wall Street Journal report said Foxconn chairman Terry Gou has persuaded Alibaba executive chairman Jack Ma to make a joint investment. An investment in Snapdeal could help the Taiwanese firm gain a foothold in the booming Indian market.
Foxconn is also said to be looking to develop a logistics operation apart from a funding platform for Indian startups in an attempt to diversify its portfolio.
Foxconn recently announced it was looking to build 10-12 plants in India by 2020, which may include an iPhone manufacturing facility as well. The company separately announced with fellow Taiwanese firm Innolux it was looking at investment opportunities in the country.
Alibaba has already made its intensions of gaining a foothold in India's burgeoning e-commerce industry. The company seems to be still looking at options. It has invested an estimated $500 million for a 25 per cent stake in Paytm, an online payment solutions provider and marketplace. The company was recently reported to be eyeing a stake in Micromax, a leading mobile and tablet manufacturer in the country.