Foxconn $200 Mn bet on Snapdeal now barely worth $3 Mn

Snapdeal

One of the early backers FIH Mobile–the investment subsidiary of Foxconn Technology Group has written off an additional $40 million in Snapdeal.

This is the second write off from the Hong Kong-based company in the Gurugram-based e-commerce marketplace. In August last year, Foxconn had written down 80 per cent of its $200 million investment in Jasper Infotech– parent company of Snapdeal.

FIH had invested about $200 million in Snapdeal for a 4.07 per cent stake in August 2015 and recognised an impairment loss of $160 million.

Earlier, eBay had written off its $61 million investment in Snapdeal followed by the company’s prime-backer SoftBank.

The Masayoshi Son-led investment conglomerate had incurred a valuation loss of $1.4 billion for FY 17, mainly on account of its two biggest investments in India – Snapdeal, and Ola.

Meanwhile, Kalaari Capital which holds about eight per cent stake in Snapdeal was also planning to sell about 35-40 per cent of its overall investment of Rs 135 crore in the company.

FIH has estimated that the recoverable amount of its investment in Jasper Infotech is $3 million. According to investors the failed merger between Flipkart and Snapdeal was the major reason behind FIH’s loss of $160 million.

The development comes on the back of Snapdeal selling of its SaaS-based warehouse management platform Unicommerce eSolutions. It was the fourth business sold by Jasper Infotech, after Freecharge, Gojavas and Vulcan Express.

Earlier, the Kunal Bahl-led company’s yearly report revealed that it suffered a loss of Rs 4,647 crore in FY 17 as compared to Rs 3, 340 crore in the previous fiscal. The company’s total revenue also incurred a loss and stood at Rs 1,291.3 crore in FY17 from Rs 1,478.2 crore in the previous year.

The development was first reported by ET.

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