Snapdeal’s founders and early investor Nexus reached a deal with SoftBank to sell the Indian e-commerce company to the country’s top online marketplace Flipkart, ET Now reported.
Earlier in the week Reuters reported Japan-based SoftBank was working to orchestrate a merger between the two e-commerce players.
SoftBank invested nearly $2 billion in Snapdeal, making it one of the Japanese company’s largest investments in India.
Snapdeal’s founders and Nexus agreed to the terms of a SoftBank brokered deal, with Snapdeal founders each reaching $15 million and Nexus being paid between $50 million and $60 million, the business news site reported. Flipkart is expected to sign a deal and commence due diligence soon.
In late March Snapdeal denied reports it was discussing a potential sale to domestic rivals Flipkart and Paytm. Snapdeal is facing increased competition, and in late 2016 announced plans to cut nearly half its workforce of 4,300 people after losing the number two spot in India’s e-commerce market to Amazon.
Flipkart announced in early March it was looking to raise up to $1 billion in its latest funding round, which could value the startup at $7 billion to $8 billion. Flipkart, established in 2007, was valued at about $11.5 billion in August 2016, down sharply from its $15 billion valuation earlier in the year as competition in what is one of the world’s most fiercely contested markets intensified, and funding became harder to line up.