Snapdeal

Timeline

1. 2010Kunal Bahl and Rohit Bansal start Snapdeal on 4 February as a daily deals website selling coupons and discounts.Jasper Infotech is the holding company
2. 2010The holding company buys Grabbon.com, a Bengaluru based group buying site, for an undisclosed sum.
3. 2011Snapdeal raises 12 million dollars from Nexus Venture Partners and Indo-US Venture Partners in January.
4. 2011A second round of 45 million dollars follows in July from Bessemer Venture Partners and existing investors.
5. 2011eBay leads a 50 million dollar round and Snapdeal moves from daily deals to a full online marketplace in October.
6. 2012Snapdeal buys eSportsBuy.com, a Delhi based online sports goods retailer.
7. 2013Snapdeal acquires Shopo.in, a customer to customer marketplace.
8. 2014Snapdeal acquires Doozton and Wishpicker, and raises 133 million dollars in a round led by eBay.
9. 2014BlackRock, Temasek and PremjiInvest add 105 million dollars, and SoftBank invests 647 million dollars in October.
10. 2015Alibaba, Foxconn and SoftBank put in 500 million dollars in August.
11. 2015Snapdeal acquires Unicommerce, a 20 per cent stake in GoJavas, RupeePower, the discovery site Exclusively.in and the payments company Freecharge.
12. 2016Ontario Teachers' Pension Plan and others lead a 200 million dollar round at a valuation of 6.5 billion dollars.
13. 2016Reports say SoftBank wants to merge Snapdeal with Flipkart, and talks run for months.
14. 2017The Flipkart deal collapses in July and Snapdeal begins the plan it calls Snapdeal 2.0.
15. 2017Freecharge is sold to Axis Bank for about 385 crore rupees, and the GoJavas stake goes to Pigeon Express.
16. 2018Logistics arm Vulcan Express is sold to Future Supply Chain Solutions for about 35 crore rupees.
17. 2019Snapdeal reports revenue of 899 crore rupees and a net loss of 188 crore rupees for the year ended March 2019.
18. 2020More than 27 million unique buyers shop on the platform during the year, up from 8.99 million in 2018.
19. 2021Snapdeal files draft papers for an initial public offering.
20. 2022The listing is called off in December; Reuters reports that the 152 million dollar issue was withdrawn because of weak markets.
21. 2022AceVector Group is formed in July to hold Snapdeal, Unicommerce and Stellaro Brands.
22. 2023Snapdeal integrates with the government backed Open Network for Digital Commerce and says it draws about 86 per cent of its business from non metro areas.
23. 2024Unicommerce, in which Snapdeal is the promoter, lists on the Indian exchanges in August after an offer that was oversubscribed 168 times.

What it does

Snapdeal runs an online marketplace. It does not hold most of the stock it sells: instead it connects small manufacturers, traders and regional brands with buyers who are price sensitive and mostly outside the large cities.^[1] The company calls the segment it serves value commerce, meaning everyday fashion, home and general merchandise, often without a well known brand name on the label.^[2]

Fashion and home products make up about 70 per cent of what it sells, with the rest coming from electronics accessories and other categories.^[2] The company has said its platform carries about 200 million listings, and that more than 500,000 sellers are registered on it.^[1] Snapdeal claims buyers in more than 3,700 towns, and it reports coverage of over 27,000 pin codes.^[1]

Its argument to sellers is that a small manufacturer who would once have needed a distributor can reach a national market directly, and its argument to buyers is that the same product costs less than on a marketplace that sells branded goods because the chain from factory to buyer is shorter.^[2] The company also says that because much of its catalogue is not directly comparable between sellers, discounting matters less to it than to rivals who compete on the same popular brands.^[2]

Practically, the business is an asset light one. Snapdeal keeps inventory low, leans on sellers and third party logistics for delivery, and keeps operating costs from growing in step with order volumes, which is the model it chose deliberately after 2017.^[2]

History

Snapdeal was founded on 4 February 2010 by Kunal Bahl and Rohit Bansal as a daily deals platform, at a time when the Indian online market was small and coupon sites were the easiest way to persuade people to buy on the internet.^[1] It raised seed money within months and then moved to a marketplace in October 2011, where sellers rather than the company own the stock.^[1]

Growth between 2014 and 2016 was rapid and loud. Snapdeal bought companies at a steady pace, raised money in rounds led by eBay, BlackRock and SoftBank, and at its peak in the summer of 2015 claimed a share of more than 30 per cent of Indian e-commerce.^[2] In February 2016 it raised 200 million dollars at a valuation of 6.5 billion dollars, which made it the second most valuable e-commerce company in the country.^[1]

The fall was faster than the rise. Talks to merge with Flipkart ran for more than half a year, and when they ended in July 2017 the company was left with money for barely a month and a business that was losing money quickly.^[2] Bahl has said the choice was between a slow death and a hard reset, and the reset became Snapdeal 2.0: sell everything that was not the marketplace, cut costs hard, and concentrate on value commerce.^[3]

That plan worked better than most people expected. Between 2017 and 2020 the company reduced its losses by about 95 per cent while revenue from operations grew by about 85 per cent, and it has said it reached break even in several individual months.^[2] An initial public offering was prepared in 2021 and then dropped in December 2022 as technology valuations fell.^[1]

Founders and leadership

Kunal Bahl co-founded the company in 2010 when he was 24, and Rohit Bansal, who had worked with him before, became its co-founder and chief operating officer.^[2][3] Bahl studied at Delhi Public School R. K. Puram and then at the University of Pennsylvania, where he took degrees at the Wharton School and the School of Engineering, and he worked briefly at Microsoft before returning to India in 2007.^[1]

The two founders held on to the business when its largest investor, SoftBank, wanted a sale to Flipkart, and their survival as owner operators became part of the company's public story: Bahl has described Snapdeal as the last large entrepreneurial Indian e-commerce company left standing against corporate owned rivals.^[2]

Both founders also invest through Titan Capital, their personal fund, which backed companies including Ola, Urban Company, Mamaearth, Razorpay and Shadowfax.^[1] Bahl has served on the National Startup Advisory Council and as chairman of the CII national committee on e-commerce.^[1]

Day to day leadership sits with the founders and a small senior team. The company has been careful to present itself as lean since 2017, and it says operating costs that do not grow linearly with scale are what allow it to compete on price without discounting.^[2]

The value commerce model

Value commerce is the idea that the next large wave of Indian online buyers is not shopping for brands. Bahl has put the opportunity at 163 billion dollars, arguing that the unbranded market is about three times the size of the branded goods market that the industry chased until 2016.^[2]

The buyers in that market, in his account, are looking for a discretionary purchase within a narrow price band and care less about the logo than about whether the product is worth the money.^[2] That pushed Snapdeal away from the newest high margin gadgets and towards apparel, home decor and general merchandise, which now dominate its catalogue.^[2]

The change in the market that made the bet possible was cheap mobile data. Jio's entry in 2016 brought hundreds of millions of first time internet users online, most of them in small towns and many of them from low and middle income households, while regional manufacturers began selling directly instead of through wholesalers.^[2] Snapdeal positioned itself between those two groups.^[2]

The strategy also has a defensive logic: value shoppers are less attractive to Amazon and Flipkart, whose economics favour higher value baskets, so Snapdeal can hold a niche without matching their spending. It also means the company earns less per order, which is why it keeps its own costs low.^[2]

Funding history

Snapdeal's early money came from venture funds. It took 12 million dollars in January 2011 from Nexus Venture Partners and Indo-US Venture Partners, followed by 45 million dollars in July 2011 from Bessemer Venture Partners and existing investors, and a third round of 50 million dollars the same year from eBay and others.^[1]

In February 2014 eBay led a round of 133 million dollars that also included Kalaari Capital, Nexus, Bessemer, Intel Capital and Saama Capital.^[6] A month later BlackRock, Temasek Holdings and PremjiInvest put in another 105 million dollars, and in October 2014 SoftBank invested 647 million dollars, becoming the largest shareholder.^[1]

In August 2015 Alibaba Group, Foxconn and SoftBank together invested 500 million dollars.^[1] In February 2016 Ontario Teachers' Pension Plan and Brother Fortune Apparel led a round of 200 million dollars that valued the company at 6.5 billion dollars.^[8]

The last round was a rescue rather than a growth round. In May 2017, with a sale to Flipkart under discussion and cash running out, Snapdeal received 113 crore rupees from Nexus Venture Partners and its two founders, with Nexus issued shares worth 96.26 crore rupees, and Bahl and Bansal taking shares worth 8.45 crore rupees each.^[4][5]

A listing was attempted next. The company filed for an initial public offering in 2021, and in December 2022, with technology valuations falling, it withdrew the 152 million dollar issue.^[1] Since then it has been funded by its own operations and its group companies rather than by fresh equity in a public market.^[1]

Acquisitions and divestments

Between 2010 and 2016 Snapdeal bought companies almost every year: Grabbon in 2010, eSportsBuy in 2012, Shopo in 2013, Doozton and Wishpicker in 2014, and in 2015 a stake in Smartprix, the luxury fashion discovery site Exclusively.in, a 20 per cent stake in the logistics company GoJavas for about 120 crore rupees, the e-commerce software provider Unicommerce, the financial transaction platform RupeePower, the mobile payments company Freecharge, and the advertising technology firm Reduce Data.^[1][7]

The company has since said it spent about 400 million dollars on the Freecharge purchase and a group of smaller deals, including MartMobi and the investment in PepperTap, and that most of that money did not come back.^[2] That is the clearest illustration of what Snapdeal 2.0 changed: it stopped buying growth.^[2]

The unwinding was quick. Freecharge went to Axis Bank for roughly 385 crore rupees in 2017; GoJavas, in which Pigeon Express held 51 per cent from August 2016, was sold out entirely in March 2017; and Vulcan Express, the logistics arm, went to Future Supply Chain Solutions for about 35 crore rupees in 2018.^[1][2][10]

Unicommerce is the exception that stayed. Snapdeal bought the Gurugram based software company in March 2015 at a valuation of more than 40 million dollars, and it is the asset the group now holds most visibly, since Unicommerce listed on the exchanges in 2024.^[15]

The Flipkart merger that never happened

In the second quarter of 2016 reports emerged that SoftBank, the company's largest investor, wanted to merge Snapdeal into Flipkart, then the market leader.^[1] Discussions went on for months and involved valuation and side payments to early backers Nexus Venture Partners and Kalaari Capital, both of whom resisted.^[1]

The talks failed in July 2017. Bahl has since said the process had dragged on for more than half a year with the business losing money and cash reserves draining, and that a decision had to be taken immediately.^[2] The board's inability to agree meant Snapdeal stayed independent.^[1]

At the same time SoftBank had given up on the marketplace and was trying to engineer the sale, which is why the failure looked at first like an ending rather than a reprieve.^[4] Instead it forced the founders to write the plan that Bahl presented internally as Snapdeal 2.0, a stripped down marketplace with sharply lower costs.^[3]

Freecharge: bought high, sold low

Freecharge, a mobile payments company, was acquired by Snapdeal in April 2015 and was the largest purchase the company ever made.^[1] The deal was widely described at the time as the biggest acquisition in Indian consumer technology, and it was part of the reasoning behind the 113 crore rupee financing that Nexus and the founders provided in 2017, since the share issue was connected to the Unicommerce purchase from a group that included Nexus, Bahl and Bansal.^[4]

Two years later the same asset was sold to Axis Bank for about 385 crore rupees, a fraction of what had been paid for it.^[1][2] The sale is the single clearest number in the Snapdeal story of 2016 and 2017: a company that had been valued in billions had to sell its most expensive acquisition at a heavy discount to raise cash.^[2]

The company's own account is that Freecharge and the other non-core businesses were divested so that resources could go to the marketplace, which was the only business it believed it could win.^[1] Freecharge later changed hands again and is now owned by Axis Bank, which folded it into its own payments business.^[1]

Unicommerce and AceVector Group

Unicommerce, founded in February 2012 by three IIT Delhi alumni, Karun Singla, Vibhu Garg and Ankit Pruthi, sells software that manages orders, warehouses and returns for online sellers, and by the financial year 2023 its platform handled between 20 and 25 per cent of India's e-commerce dropship transaction volumes.^[15] Snapdeal bought it in March 2015 for more than 40 million dollars after it had raised money from Nexus and from Snapdeal's own founders.^[15]

The company has been profitable since the year ended March 2021 and has stayed profitable, which makes it the cash generative part of the group, and in 2024 it bought Shipway to add logistics tracking and post purchase automation.^[15]

In July 2022 Snapdeal formalised a group structure under the name AceVector Group, holding Snapdeal, Unicommerce and Stellaro Brands, which was meant to make the parts of the business legible separately.^[1] In August 2024 Unicommerce was listed on the BSE and the NSE after an offer that was oversubscribed 168 times, and Kapil Makhija, its chief executive since 2017, runs it.^[15]

The listing matters for Snapdeal itself because a listed, profitable software company inside a private marketplace group gives the group a public valuation marker, and because AceVector remains its promoter.^[15]

Logistics and technology

Snapdeal's logistics history is a story of building and then shedding. It bought a 20 per cent stake in GoJavas in 2015 for about 120 crore rupees, later raised that to 49 per cent, and then sold the whole holding after Pigeon Express took control of the company.^[7][10] Vulcan Express, built in house as its delivery arm, went to Future Supply Chain Solutions for about 35 crore rupees in 2018.^[10]

What replaced those assets is a network of third party couriers, which keeps fixed costs low and lets the company scale up and down with sales.^[2] Snapdeal says it delivers across more than 27,000 pin codes, which it reached partly by adding about 1,500 pin codes during the pandemic year of 2020.^[2]

On the technology side the marketplace runs the usual machinery of an Indian e-commerce platform: a catalogue of about 200 million listings, seller onboarding tools, and a shopping app whose recommendations are built around language, video and voice rather than the search boxes that work for English speaking buyers.^[2] Bahl has said the company's engagement is built on those three themes rather than on how to sell better.^[1]

Sellers, buyers and reach

More than 500,000 sellers are registered on Snapdeal, and the company added about 20,000 during the pandemic year alone.^[2] A large part of that base is made up of small manufacturers rather than trading firms, which is the change Bahl describes as the second generation of Indian online selling: factories selling direct instead of selling to a wholesaler who then lists online.^[2]

In 2020 the company said 27 million unique buyers had bought on the platform during the year, up from 8.99 million in 2018, and that it had added six million new buyers in the months of the Covid-19 lockdown.^[2] More than 90 per cent of its orders come from outside the metros.^[1] By 2023 it was reporting that about 86 per cent of its business came from non metro areas, the number it used when it joined the government backed Open Network for Digital Commerce.^[1]

Brand owners have noticed the audience. Indian consumer companies including Godrej and Himalaya have used the platform to sell directly through authorised dealers, and newer brands such as Mamaearth, The Man Company and Ustraa have partnered with Snapdeal to reach buyers in smaller towns.^[1] In 2020 the company said it would add 5,000 more manufacturer sellers to the platform during the year.^[14]

Revenue and financials

For the year ended March 2019, the last full year for which the company has discussed its numbers in public, Snapdeal reported revenue of 899 crore rupees and a net loss of 188 crore rupees.^[2] The loss is the striking figure: as recently as 2017 the company had lost 5,143 crore rupees in a single year.^[2]

Between 2017 and 2020 the company cut its loss by about 95 per cent while revenue from operations grew by about 85 per cent, and traffic roughly doubled by its own measure.^[2] It has also said it was profitable in several individual months during that period, though not for a full year.^[2]

The improvement came from two things rather than from a surge in sales. Costs fell because non-core businesses were sold and staff were cut sharply, with some estimates at the time putting the layoffs at more than 1,000 people from a workforce that had once been close to 10,000.^[3] Revenue rose because the marketplace kept the sellers it had and stopped spending to buy users, which is a cheaper kind of growth.^[2]

The planned public listing would have given the company permanent capital and a share currency, and its withdrawal in December 2022 means Snapdeal remains a private business whose financials are published only when it chooses. The group's public disclosure now comes mainly through Unicommerce, which is listed.^[1][15]

Shareholding and ownership

Snapdeal is owned by a group of investors assembled over a decade. SoftBank became the largest shareholder when it invested 647 million dollars in October 2014, and eBay, Alibaba and Foxconn also held stakes at different times.^[1] Nexus Venture Partners and Kalaari Capital, both early backers, stayed with the company through the merger talks and the rescue round of 2017.^[4][5]

The founders, Kunal Bahl and Rohit Bansal, hold shares directly and took more in the 2017 financing, which is why they were able to resist a sale that the largest shareholder wanted.^[4] The company itself is held through Jasper Infotech Private Limited, the entity named in the funding documents and in the group structure created in 2022.^[4][1]

Since the failed listing the ownership has not changed in public: there has been no new equity round, no secondary sale of control, and no buyback disclosed, which leaves the same investors holding the same private company.^[1] Within the group, Unicommerce is the entity with a public shareholder register, and AceVector, which also holds Stellaro Brands, is its promoter.^[15]

Employees and offices

Snapdeal's registered base is in New Delhi, which is the headquarters recorded in the company's own documents and in the encyclopaedia entry on it, while several business profiles and news reports over the years have described it as a Gurugram company.^[1][2] The two are a short drive apart and the company has used both descriptions; what matters for the record is that its operations have always been in the National Capital Region.^[1]

The size of the workforce is the number that says most about the company's history. At its peak in 2016 it employed close to 10,000 people across the marketplace, the delivery arm and the businesses it had acquired.^[3] After the failed merger the company cut sharply, with reports at the time estimating more than 1,000 job losses in a single round of restructuring, and it has run since then with a much smaller team.^[2][3]

That lean structure is deliberate and it is now part of the strategy rather than a consequence of hard times. Fewer people and no owned delivery fleet keep operating costs from rising in step with order volumes, which is what allows a marketplace with revenue well under 1,000 crore rupees to keep trading.^[2]

The company works with third party courier partners rather than employees for delivery, and with software from its own group for seller operations, so the payroll does not carry either function.^[2][15]

Open Network for Digital Commerce

Snapdeal integrated with the Open Network for Digital Commerce in 2023, the government backed project that aims to let buyers find sellers across many platforms rather than inside a single company's app.^[1] Reporting on the integration noted that more than 86 per cent of its business came from non metro areas, exactly the buyers the network was designed to serve.^[1]

The logic for a smaller marketplace is straightforward. On an open network a seller's catalogue can be discovered by buyers on other apps and by buyers who never install Snapdeal at all, which turns a niche audience into a wider one without the marketing spend that a closed app requires.^[1]

The risk is equally clear. If the network works as intended, the marketplace's own brand matters less than the seller and the price, which suits a company that has already decided to compete on price rather than on service or exclusivity.^[1]

Snapdeal is one of several Indian platforms that joined the network, and its participation sits alongside its wider pitch that the next decade of Indian e-commerce will be built for buyers in towns that the first decade ignored.^[1]

What comes next

The company's stated plans are modest by the standards of its own past. In 2021 it said it intended to enter offline retail in smaller Indian cities, which would put physical stores around the online business rather than replace it, and it has continued to sign partnerships that widen the catalogue instead of raising fresh capital.^[1]

On the seller side the target has been manufacturers rather than traders. Snapdeal said in 2020 that it would add another 5,000 manufacturer sellers during the year, and the argument it makes to them is that a factory can reach a national market without building a distribution network.^[14] It also works with consumer brands such as Godrej and Himalaya that want authorised dealers selling their products in smaller towns.^[1]

On the group side, AceVector gives the company a structure in which a listed software business sits alongside the marketplace, and the marketplace can be run for cash rather than for growth. The absence of a public listing means there is no obligation to chase quarterly numbers, and the founders, who kept control through the worst of 2017, have used that freedom to move slowly.^[2][15]

What is not on the table, on the company's own account, is another attempt to compete with Flipkart and Amazon for the branded, big city buyer.^[2] The bet is that there are more buyers in the price band it serves than in the one its rivals fight over, and that serving them cheaply is a business even if it is not a large one.^[2]

Competition

Snapdeal competes with Flipkart and Amazon India for sellers and for buyers, but those two compete mainly for the branded, higher value basket, and both of them spend far more on logistics, marketing and devices than Snapdeal can.^[2] The company's answer has been to avoid that fight altogether and define its market as the unbranded, lower priced segment.^[2]

The more direct threat came later from Meesho, which built a large business on exactly the same insight about small town, price sensitive buyers, and by 2022 was chasing the same seller base of small manufacturers. JioMart, launched by Reliance Industries, added another well funded competitor with an interest in non metro retail.^[2]

Two structural facts keep the company in the game despite that pressure. The first is that its cost base is small, so it does not need to be large to be profitable. The second is that its buyers are habitual rather than opportunistic, arriving with a specific price band in mind, which makes retention cheaper than acquisition.^[2]

Its clearest competitive advantage in the group is not the marketplace but the software business: Unicommerce sells to sellers across the industry, including sellers on rival marketplaces, and it is the part of the group that has been profitable and listed.^[15]

Controversies and criticism

In January 2021 the Office of the United States Trade Representative named Snapdeal in its review of markets where counterfeit goods are sold, which put the company on a list with some of the largest platforms in the world.^[1] Snapdeal sent a notice asking for the statement to be retracted and for a corrigendum, and it was dropped from the following review, which was released in 2022.^[1]

The company has responded to that criticism by joining the International Trademark Association, whose members pledge to protect intellectual property on online marketplaces, and by pointing to its takedown policies.^[12] Its website also carries a public report abuse and takedown policy.^[16]

The company has also faced criticism over its treatment of employees. The cuts that followed the failed merger were drastic, with reports at the time estimating more than 1,000 job losses, and the workforce has never returned to its 2016 size.^[3] Buyers have complained about the quality of goods sold by unbranded sellers, which is a criticism that follows the whole value commerce segment rather than Snapdeal alone.^[1]

Marketing and campaigns

Snapdeal was one of the first Indian internet companies to buy mass market advertising. In March 2015 it engaged Aamir Khan for a year long campaign built around the Diwali season under the line Dil Ki Deal, at the time a sign that e-commerce had moved from a technical audience to a television one.^[1]

The campaign also brought trouble. Remarks the actor made in a personal capacity during the same period triggered a backlash that attached itself to the brand, and the episode became a standard example of the risk of a celebrity led campaign in India.^[1]

Since 2017 the company markets itself through partnerships rather than through a single face. It has worked with Croma to sell electronics online, with JLL India for property services, with Pantaloons to widen its fashion catalogue, with GoKwik to improve checkout, and with Agoda to add travel options.^[1]

The brand it now sells is the value proposition itself: low prices, delivery anywhere, and a catalogue that looks like a market rather than a mall. That is a deliberate match with the segment, and it is why the company describes its task as recreating the bazaar online rather than imitating a brand store.^[1]

Reading the numbers

Snapdeal is the rare Indian internet company whose most important number is a loss that got smaller. In 2017 it lost 5,143 crore rupees; by the year ended March 2019 the loss was 188 crore rupees on revenue of 899 crore rupees.^[2] Read on its own that revenue figure is small against the 6.5 billion dollar valuation of 2016, which is exactly the point: the company that survived is not the company investors valued.^[2]

The second number worth holding on to is the 400 million dollars spent on acquisitions, most of which was written off in effect when Freecharge went to Axis Bank for about 385 crore rupees.^[2] The third is the cost base, which was cut deeply enough, and by enough people, to make a modest revenue base viable.^[2][3]

What the numbers do not show is a fast growing business. Revenue growth of about 85 per cent between 2017 and 2020 came off a very low base and has not been followed by comparable disclosures since, and the withdrawal of the initial public offering removed the one event that would have forced a full set of audited numbers into public view.^[1]

The group's clearest value today therefore sits in the listed software company rather than in the marketplace, and anyone reading Snapdeal's prospects should read Unicommerce's filings alongside its own story.^[15]

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