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Deal or Ordeal?

Amid falling orders and shrinking market share, Snapdeal faces a tough choice of either roping in a white knight or run the risk of fading into oblivion

Illustration: Kishore Das

“They behaved like junkies on dope!” That’s how an investor describes 34-year-old Kunal Bahl and his best pal Rohit Bansal, the co-founders of Snapdeal, once a promising e-commerce player but now relegated to the sidelines in a hyper-competitive online retail world. At its peak valuation of over $6.5 billion in 2016, Snapdeal had all the strapping of a unicorn till it all fizzled out to today where it’s now turned into a unicorpse, a Silicon Valley term that describes a start-up whose valuation falls below $1 billion. Snapdeal, which attracted over $1.7 billion from investors, had everything going for it, till the co-founders blew it all up in the wild chase to take on the might of Flipkart and Amazon. 

Despite its travails, Snapdeal is still online and clocked a turnover of Rs.903 crore in FY17, but it is no longer a strong contender in the business. Though detailed financials of Snapdeal for FY17 are not available, it’s quite likely that it might have slipped deeper into the red. In fact, the loss figure for FY16 at Jasper Infotech, the holding company of Snapdeal, had more than doubled to Rs.3,316 crore, while revenues stood at Rs.1,457 crore. Call it hubris or aggression, riding on the back of a record $700-million SoftBank cash infusion the co-founders felt that they could leapfrog over rivals in the online retail race. Not to mention the fact that unlike the Bansals of Flipkart who cashed out much later, the Snapdeal co-founders also got to take money off the table very early in the game. “Even before the model could be proved if you let a young founder make money, unknowingly you have already killed his hunger,” says the earlier mentioned investor. Unlike Flipkart, which has found its calling in fashion and electronics, and Amazon with Prime, Snapdeal could never find its USP. In a bid to scale overnight, the co-founders ended up making a raft of acquisitions, which ended up as an albatross around Snapdeal’s neck (see: Far from a string of pearls). None of the deals added significant value with a majority being sold off as distressed assets. Neither did the company reply to Outlook Business’ email, nor did Bahl respond to calls or messages.

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