US ecommerce giant eBay has reported in its annual report that its investment of $61 million in India has resulted in a complete loss and it has had to write down this entire amount. The amount was eBay’s investment in Indian online portal Snapdeal. As is known, eBay has now shifted its loyalty to Flipkart and invested in it. But before this, it was Snapdeal that eBay had supported, becoming one of the first investors in the startup.
And it is not eBay alone that has had to bear losses in the Indian marketplace. SoftBank, the Japanese investor, who has been straddling the Indian startups with their deep pockets, had also announced that its loss in the Indian marketplace was to the extent of $1.4 billion.
Again, this loss was from its investment in Ola and Snapdeal. The taxi aggregator is owned by the corporate name ANI Technologies. Similarly, Snapdeal is represented by its parent Jasper Infotech. Out of this a large component is attributed to losses made in Snapdeal only.
Snapdeal has had to bear the brunt of these happenings as it could not raise funds during the whole of 2017 and the e-tailer has had to reduce its operations and suffer a drop in the revenues by over 40%. Moreover, SoftBank tried its best to sell Snapdeal to rival Flipkart, which did not materialize. Observers say that the hurdles were put by some of the early investors in Snapdeal, who were not able to agree to the deal offered in the merger proposal.
Snapdeal has now decided to continue independently with its new Snapdeal 2.0 strategy and has been selling off its non-core assets. It sold its payments arm FreeCharge to Axis Bank, logistics arm Vulcan Express to Future Group and is now looking to sell its Unicommerce unit.