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Snapdeal Success Story: From Coupon Business to Consumer-focused brand

Kunal Bahl and Rohit Bansal started from an offline couponing business and was initially called as MoneySaver. Their coupon business was doing good and they wanted to move to the next level. They started meeting with investors and it was then they met Vani Kola. The first meeting did not go as planned but after another meeting, Vani Kola’s venture capital firm decided to invest in Snapdeal and realized the earning potential of the company. For the first few months, it was a difficult but eye-opening journey. So with hard work and dedication, they manage to offer the best services to the customers.

In November 2011, they were inspired by the success of Alibaba and they made their biggest decision to start an online marketplace. As they have already acquired huge market share in deals business at that time, it was a very risky decision and investors were surprised too. The company has seen phenomenal growth in a short span and today it is valued at a billion dollars, all because of vision of its founders.

Investment in Snapdeal

  • In January 2011, Snapdeal received a funding of $12 million from Nexus Venture Partners and Indo-US Venture Partners.
  • In July 2011, the company raised a further $45 million from Bessemer Venture Partners, along with existing investors Nexus Venture Partners and Indo-US Venture Partners.
  • Snapdeal then raised the 3rd round of funding worth $50 million from eBay and received participation from existing investors that are Bessemer Venture Partners, Nexus Venture, and Indo-US Venture Partners.
  • Snapdeal received its 4th round of funding of $133 million on Feb 2014. The 4th round of funding was led by eBay with all the current institutional investors, including Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital, and Saama Capital.
  • Snapdeal received its 5th round of funding of $105 million in May 2014. The 5th round included investments by Blackrock, Temasek Holdings, PremjiInvest, and others. This  round made Snapdeal value at $1,000,000,000.
  • Snapdeal received its 6th round of funding in Oct 2014 from Softbank with investments worth $647 million in fresh capital. This makes SoftBank the largest investor in Snapdeal.
  • Snapdeal received its 7th round of funding in Aug 2015 from Alibaba Group, Foxconn and SoftBank with investments worth $500 million in fresh capital.

Snapdeal founders Kunal Bahl and Rohit Bansal last year announced a new strategy called Snapdeal 2.0. They figured the valuable part of their business and turned around the company by narrowing their focus to become cash-flow positive value merchandise for buyers. By focusing so much on perfecting this model, they have been able to create tremendous operating leverage in the business. Most of the revenue now comes from commissions and advertising.

Snapdeal is one of the fastest growing e-commerce companies in India today with the largest online marketplace. In just two years, the company went from scrapping their group coupon business and starting an online marketplace to become a billion dollar company. Its year on year growth was almost 600%. Their zeal to succeed as the best B2C marketplace is what sets them apart.

Snapdeal is planning a huge comeback with a new business model. Snapdeal will look to reinvest the capital to fuel growth again as the firm looks to boost volumes which have now almost doubled since its troubled days in 2017. The company is getting back to business and has started with selling its cloud-based inventory management subsidiary, Unicommerce. The fresh funds will help the company to boost up its promotions and offer more discounts.