Thursday, 14 December, 2017

Snapdeal, Flipkart deal may leave staff richer by Rs 193 cr

Snapdeal, Flipkart deal may leave staff richer by Rs 193 cr Snapdeal, Flipkart deal may leave staff richer by Rs 193 cr
Frank Williams | 14 May, 2017, 22:42

Sale of a company often leaves employees high and dry, but not in the case of Snapdeal that may offer a Rs 193 crore bonanza to its staff if the homegrown e-commerce firm is taken over by larger rival Flipkart.

India's most awaited startup deal is said to be almost closed as the largest online marketplace Flipkart has made an informal offer to buy struggling smaller rival Snapdeal for $1 billion in an all-stock deal.

According to sources, with this deal, Snapdeal founders will get about $20-$25 million each. Snapdeal founders Bahl and Bansal have been offered $15 million each, with an additional $30 million for the entire management team and employees at Snapdeal.

According to regulatory documents sourced from data platform Tofler, Kola sent her resignation letter to the board of Snapdeal on 2 May.

Online payment firm PayTM was also in talks to acquire Snapdeal in initial days, however, it backed off over the valuation issues.

They said the term sheet with Flipkart could be signed within this week and the due diligence for the deal would commence immediately thereafter.

If the deal goes through, Snapdeal founders will get Dollars 60 million (cumulative), of which half will be given to employees.

Vani Kola, the representative of Kalaari Capital on Snapdeal board, has resigned ahead of the potential sale of the e-commerce firm.

Chinese President Xi pledges billions for new Silk Road, snubs India
India on Saturday said it could not "accept a project that ignores its core concerns on sovereignty and territorial integrity". He said his government will provide aid worth 60 billion yuan ($8.7 billion) to developing countries and global organizations.

Although the Snapdeal board lacked failed to arrive at a consensus on the exit payout for investors Nexus Venture Partners and Kalaari Capital, it was unanimous on the fact that Snapdeal had become unviable.

Apart from Kalaari Capital, which held one board seat, the seven-member Snapdeal board comprises SoftBank, which holds two seats, founders Kunal Bahl and Rohit Bansal - who have a seat each - Nexus Venture Partners, which has one seat and Akhil Gupta, vice-chairman of Bharti Enterprises as an independent director.

Snapdeal was valued at $6.5 billion in its last funding round in February 2016.

Kalaari and Nexus are now feuding over their exit payouts from SoftBank-SoftBank has proposed to hand out $60 million to Nexus and about $30 million to Kalaari.

One of the leading contenders in the Indian e-commerce space, Snapdeal has seen its fortunes failing amid strong competition from US-based Amazon and Flipkart.

SoftBank yesterday said it suffered a loss of $1 billion (Rs 6,500 crore) on its investment in Snapdeal during 2016-17, nearly matching the money it put in the home-grown marketplace.

The last few months at Snapdeal have seen massive voluntary attrition.

This is published unedited from the PTI feed.

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