Wednesday, October 4

Snapdeal set to acquire Shopclues

New Delhi: Online e-commerce platform Snapdeal is in talks to acquire rival ShopClues in a deal likely to be pegged around $200-$250 million, according to sources.

Snapdeal has started the due-diligence process and is likely to take a call on the acquisition over the next few weeks, the sources close to the development said.

When contacted, a Snapdeal spokesperson declined to comment, while ShopClues said the company does not comment on market rumours.

The two e-commerce companies have engaged in such discussions in the past as well, but this is the first time that it has made it to the due-diligence phase.

The deal will be an all-stock deal and is expected to be valued between $200 and $250 million, the sources added.

ShopClues’ investors, including Singapore’s sovereign wealth fund GIC, Helion Venture Partners, Tiger Global, Nexus Venture Partners and Unilazer Ventures, are expected to exit post the deal.

The deal, if it goes through, will help the two companies compete together more aggressively against giants including Walmart-owned Flipkart and Amazon in the Indian market.

Snapdeal, which walked away from a deal with Flipkart in 2017 to chart its own independent strategy for growth, has managed to bring down its consolidated loss substantially to ₹613 crore for 2017-18 from ₹4,647.1 crore in 2016-17.

The company had stated that it is focussing on maximising the operating efficiency of its marketplace and implementing its planned growth initiatives.

ShopClues (which is registered as Clues Network) also narrowed its losses to ₹2.08 billion ( ₹208 crore) for the year ended March 2018, against a loss (after tax) of ₹3.47 billion ( ₹347 crore) in 2016-17. The company, which has raised around $250 million so far, focusses on tier II and III cities.