Anand Piramal, Executive Director of the Piramal Group has invested in Snapdeal. The investment has been made by Anand in his personal capacity. The fresh round of funding has come for the SoftBank-backed company after 2 years.
While the amount invested by Piramal is undisclosed, receiving money from one of India’s thriving business personalities is indeed a testimony to its turnaround story. The Gurugram-based company had derived Snapdeal 2.0 strategy after it decided to call off the deal with Flipkart in 2017.
Snapdeal’s 2.0 strategy has allowed it to rapidly build a differentiated business, with a sharp focus on value-priced merchandise – the largest segment in retail. Snapdeal is a frontrunner in this market as ShopClues has been struggling, and heading towards shutdown while Paytm Mall downscaling consumer-facing biz.
Commenting on his personal investment decision in Snapdeal, Anand Piramal said, “Snapdeal’s sharp execution in bringing a great selection to the mass market segment in tier 2-3 cities has been quite successful, leveraging the growing Internet penetration in these geographies. Since 2017, Snapdeal’s revenues have grown rapidly with profitable unit economics. With hundreds of millions of first-time e-commerce buyers yet to transact, Snapdeal is well poised to grow in the future.”
Reflecting turnaround, Snapdeal recently announced audited financial results for FY19. During FY19, its revenue soared 73% and its loss dropped sharply by 71%.
Importantly, Snapdeal was also in conversation to acquire ShopClues. However, it backed out because of several reasons including outstanding payments ShopClues owes to Google, Facebook, and other third-party vendors.
As per RoC filings by Snapdeal with MCA, its consolidated revenues grew to Rs 925.3 crore in 2018-19 as compared to Rs 535.9 crore in 2017-18, marking a sharp increase of nearly 73% in a 12-month period.
At the same time, the firm also managed to significantly reduce its loss to Rs 186 crore in FY19 from Rs 611 crore reported in FY18 – a drop of nearly 71%. In the same period, Snapdeal’s revenue from operations grew 87% YoY.
