E-commerce portal Snapdeal is all set to raise $500 million in investment from Alibaba Group Holding Ltd along with SoftBank Group Corp and Foxconn, as reported from a source. The move comes as a show of faith to Snapdeal, from Asia's three biggest technology companies.
The online business place competes with Flipkart Online Services Pvt Ltd and the local subsidiary of Amazon.com Inc in the country's online shopping market, which Morgan Stanley estimates will be worth $102 billion by 2020.
It is Alibaba's first direct investment in the country. Alibaba affiliate Ant Financial Services Group in February agreed to buy 25 percent of Indian payment services provider One97 Communications. In October, Snapdeal, which connects small businesses with customers in an online marketplace, secured a $627 million investment from Japan's SoftBank, itself an early backer of Alibaba.
Alibaba was in direct funding talks with Snapdeal in March, but opted to instead invest together with SoftBank and Foxconn, as per a source. Foxconn founder Terry Gou told shareholders at an annual meeting two months ago that India is a key market this year for his group.
Snapdeal and SoftBank were not available for immediate comment. Alibaba and Foxconn declined to comment.
