In a step towards resolving the deadlock over the sale of Snapdeal to Flipkart, Kalaari Capital, one of the key investors in Snapdeal has finally agreed to come on board with the move. According to ET, Kalaari and SoftBank will work together on the deal, even as SoftBank continues its talks with other investors.
Kalaari Capital holds around 8 per cent share in the ecommerce portal, with SoftBank being the single largest shareholder with a 33 per cent stake.
The proposed sale can go through only if SoftBank can get two other major shareholders of the company to agree on the deal. Nexus Venture Partners, with a stake of 10 per cent is the next target for SoftBank.
Snapdeal founders, Kunal Bahl and Rohit Bansal each have a 6.5 per cent stake in the company. It is uncertain as to whether they are on board with the decision to sell Snapdeal to Flipkart.
Most of the investors were opposed to the valuation given to the sale, with Snapdeal valued at $1 billion, six times lower than its peak valuation of $6.5 billion.
While Kalaari Capital has received profits worth $100 million from its investment, Nexus Venture Partners hasn’t received any returns on its investment.
With Amazon and Alibaba showing their interest in the Indian online retail segment, SoftBank is keen to merge an under-performing Snapdeal with rival Flipkart. It is also keen to invest a further $1 billion in the combined entity, if the deal goes through.
Read more: Snapdeal-Flipkart deal on the rocks?