Indian online marketplace Snapdeal has raised a $ 200 million, giving it a valuation of around $ 6.5 billion, as the firm looks to ramp up investments in logistics and infrastructure in the fast-growing domestic e-commerce sector.
The fundraising, led by Canada’s Ontario Teachers’ Pension Plan and funds advised by Iron Pillar, comes at a time when there are increasing worries about incremental funding among Indian startups.
In December, Snapdeal co-founder had told Reuters the company is looking to increase spending on logistics and technology to better compete with rivals.
Indian e-commerce market, dominated by Flipkart, Amazon and Snapdeal, is estimated to be worth $ 220 billion by value of goods sold by 2025. E-tailers, however, are racking up millions of dollars in losses in their bid to capture market share through deep discounts.
The latest fundraising comes after the company raised $ 500 million raised last August in another round led by Alibaba Group Holding, SoftBank Group Corp and Foxconn.
Flipkart closed a $ 700 million fundraising round last year.
With substantial funding, Snapdeal is looking to expand its services. One area Snapdeal will focus on is to cut delivery times by investing in better data analytics and demand forecasting, co-founder Rohit Bansal had told Reuters in an earlier report, towards the end of 2015.
“We have done over 10 acquisitions and investments in the last one year, almost all of them in the field of technology or supply chain and payments,” he had said. “With all these investments we have been able to reduce our delivery times by 70 percent in the last one year.”
Quick and cheap delivery is important to be able to win over customers in a competitive industry in which companies are burning through substantial cash to grow.