HONK KONG/MUMBAI (TIP): Indian online retailer Snapdeal is seeking investment to shore up its finances after unsuccessful talks with Chinese funds and Alibaba Group Holding Ltd as it battles to remain competitive, sources with direct knowledge of the matter said.
Faced with the prospect of falling cash reserves and little interest from existing investors such as Japan’s Softbank and U.S. hedge funds, Snapdeal is now increasingly being seen as an acquisition target, they said.
“Snapdeal has been desperately looking to raise money in China for the last few months,” said a source with direct knowledge of Snapdeal’s plans.
“It had multiple rounds of talks with some Chinese funds and was also hoping to get some fresh money from Alibaba. But those talks were not going anywhere and Alibaba made it clear to them they would not write a new cheque for them given the dim outlook for making money any time soon.”
Both Alibaba, which already has a small stake in Snapdeal, and Softbank declined to comment.