For the second time in less than a year, eBay has decided to put significant capital into Indian online marketplace Snapdeal, to the tune of nearly $200 million. Obviously eBay wants to expand into the country, and sees some kind of relationship with the company going forward, but what exactly that will look like remains to be seen.
Before we get into that, though, first the news: eBay has invested $133.77 million into Snapdeal, it was announced on Wednesday. This follows a $50 million investment into the company in April of last year,
Snapdeal had previously raised over $200 million, including a $12 million investment led by Nexus Venture Partners and IndoUS Venture Partners in January 2011, and a $40 million Series B from Bessemer Venture Partners, Nexus Venture Partners and IndoUS Venture Partners in August 2011 and $75 million from Softbank in August of last year.
This latest funding puts the of money that eBay has put into the company to a total of $183.77.
For eBay, the investment is "part of its strategy to accelerate growth in emerging markets and drive eBay’s global e-commerce leadership," the company said in a blog post.
“Accelerating growth in India and other emerging markets continues to be a strategy for driving eBay’s global e-commerce leadership,” eBay Senior Vice President and APAC Managing Director Jay Lee said in statement. “eBay is excited about the prospects ahead for both Snapdeal and its own eBay India business.”
According to eBay, the two companies are not working together just yet, but the fact that eBay even makes that distinction means they probably will be at some point. In fact, there have already been intimations that the Snapdeal could become an acquisition somewhere down the line.
“When we make an investment and are cooperating with a third-party like Snapdeal, we hope to be successful and hope eventually we can take the next step,” Devin Wenig, president of eBay Marketplaces, told ReCode.
”We have a history of making minority investments where at times it works well and we take the next step and end up acquiring the target.”
VatorNews reached out to both eBay and Snapdeal for further comment on the possibility of a potential acquisition somewhere down the road. An eBay spokesperson would not comment, and Snapchat could not be reached at this time. We will update the story if we learn more.
Snapdeal was founded in 2008, and started life as a coupon site, offering discounts and coupons for local businesses all across India. Much like Groupon, the site showed the value of the purchase, the percent discount and how much will be saved. Customers paid part of their portion online and the remaining amount directly to the merchant.
In April 2012, though Snapdeal decided to abandon the daily deals model, and became an online marketplace, in the vein of eBay and Amazon.
India is obviously an emerging market, and eBay is looking to expand there before Amazon does. The company does have eBay India, but the site only has 2.1 million users. Snapdeal, on the other hand, has over 20 million registered users and represents a good opportunity for eBay to get a grip on the market.
(Image source: blog.ebay.com)