The FreeCharge auction was a vital part of Snapdeal 2.0 and without that investment, our existence as an organization would have been in danger," Snapdeal co-founder Kunal Bahl self-confessed however sharing on LinkedIn information of the E-commerce Corporation’s fight in the past year.
In April 2017, the e-commerce business perceived the drop of a unicorn that was formerly worth at $6.5 Bn, but it was revivified by creators who had an iron will.
Notwithstanding the damage of confidence from stockholders' side,Snapdeal organizers Kunal Bahl and Rohit Bansal. Twisted down an $850 Mn provide from Flipkart - the much expected, wondered, and even discussed Flipkart-Snapdeal unification was canceled after some months of negotiations in August 2017.
Also as Bahl told, it was the sale of fintech company FreeCharge that conveyed back vanished confidence for Snapdeal to recuperate from the ruins.
Thus, Why Did Snapdeal Sell FreeCharge?
The unification with Flipkart was approaching. Also, the Snapdeal founders were indomitable to alter their destiny. The business model for Snapdeal 2.0 - the Taobao of India - was previously in place. Though, the lost part of the image was an imperative extent of money, which they required to hike along till things got healthier and fetch in novel business.
"We were now going to decline a precipice if a call was not received straightaway to remain to create the business. Any advance postponement in obtaining a clear-cut verdict, one way or the additional, was surefire to be disastrous for the firm," Bahl wrote.
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However the disaster of the Snapdeal-Flipkart unification would certainly have knocked the vanity of various (associated) top investors in the Indian startup network, the founders were assured that this verdict would leave them empty-offered.
Snapdeal was dropping amounts and its cash funds were reducing very rapidly. Several team members were hardly approaching to work as they had no transparency whether or not they would have the right job if the unification occurred, and the company was not capable to provide them that transparency.
In Any Case, FreeCharge Was A Huge Loss To Snapdeal
Even though the FreeCharge sale assisted Snapdeal to retrieve on track, it was a big loss for the corporation. However, it was a loss-creating deal, as Bahl and Bansal had attained FreeCharge in April 2015 for likely $400 Mn, but it was traded for a considerably lower amount.
At that point, the deal was flaunted as the leading takeover in the Indian startup network. FreeCharge was India's as soon as second-leading digital payments firm worth at $5 Bn.
Along with, it also mislaid its possibility to be on the similar page with its playful opponents Flipkart and Amazon India - who possess their own digital payment app PhonePe and Amazon Pay, individually - at a time when the Indian fintech segment perceived a determinative development with several startups, incubators, and savings evolving within the market.
Nevertheless, the duration between April-July 2017 was not roughly measured but about carrying out its ground.
"With the FreeCharge amount in the bank, we, therefore, folded down on our hard work to drive main productivity advantages," Bahl told.
Independent Snapdeal To Continue Its Voyage
Bahl truly indicated that Snapdeal is only Indian-owned E-commerce Company quitted.
"We distinguish that we are now the only parallel e-commerce company at ruler left in India that is self-governing and not possessed or run by a huge international company," writes Bahl.
In contrast, Snapdeal made its rejoinder. In August 2017, the organizers had seemingly intended Snapdeal 2.0 to create net revenue of $23.3 Mn (INR 150 Cr) in the coming 12 months. Afterward, in an official press report, the organization appealed that throughout the time of September 1, 2017, till October 20, 2017, Snapdeal not merely augmented its sales but also improved its gross margin by six-fold than the festive season previous year.
In addition, in its FY17 funds' termination in March 2017, Snapdeal demanded to have decreased its fulfillment rate by 20% and operational damages by almost 25%.
"The company remains to provide a fast growth in driving gainful development, which will be reproduced in the outcomes for FY18," a company representative said the TOI.
Mergers, Consolidations, Acquisitions
These terms are not even rare in the international startup network and thousands of such deals have been completed. But how many such kinds of deals can claim to craft an influence on the complete network? By the way, we trust that the nose-dived Snapdeal-Flipkart unification has absolutely become the talk of the township and will continue so in the approaching times.
"What one has to gather, right when you are at the end of the gulf, is the gravel and dare to remain," Bahl wrote, closing the one year story of Snapdeal - which they, fortunately, continued under the radar - and confidences to be instructional for some and, confidently, motivating for others.