eBay in talks for Snapdeal stake

Mumbai: The world's biggest online marketplace eBay Inc is considering a minority investment in Snapdeal, as the Nasdaq-listed company weighs options in India's digital commerce industry, said people briefed on the matter. 

    eBay could join other existing investors led by Bessemer Venture Partners in the latest round of funding for the local e-commerce firm. eBay might initially acquire only a 5% stake valuing Snapdeal at around $300 million, said a source familiar with the development. 
    Snapdeal operates a managed online marketplace for electronics, fashion, lifestyle clients among others. "eBay has been evaluating a proposal from current investors of Snapdeal. eBay has been scouting for investments among the potentially big aggregators of Indian digital commerce but will be cautious," added the source mentioned earlier. 
    Founded in 2010 by Kunal Bahl, a Wharton graduate and IIT Delhi batchmate Rohit Bansal Snapdeal rejigged its business model from a daily discount deals engine to an online marketplace and has been looking to raise up to $100 million in fresh funding. Snapdeal's existing investors also include Nexus Venture Partners and Indo-US Venture Partners. It is projected to report $90 million top line revenue in 2012. 
    When contacted, a spokesperson from eBay India said, "eBay does not comment on rumours or speculation," while a Snapdeal spokesperson said he was not aware of any such development. Ebay Inc has identified countries like India and Indonesia as its growth drives. The San Jose-California-based eBay has struggled in Asia and particularly in lucrative internet markets such as Japan and China but has now reworked its global strategy. eBay has hadIndia operations since 2004 when it acquired Bazee.com and it's current monthly revenue is estimated between $11 to $16 million. 
    "Since eBay is not inventory driven and works on the marketplace model, Snapdeal fits in well. The cost of customer acquisition for Snapdeal has been one of the lowest in the industry so the business model looks sound so it makes sense for eBay," said a source who did not want to be identified. 
    eBay wants to be among the top five e-commerce players in the country where another international biggie Amazon entered through a price comparison site Junglee last year. 
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• Snapdeal manages an online marketplace for electronics, fashion, lifestyle clients, etc 

• Projected to generate $90m top line revenue in 2012, it is looking to raise up to $100m 
• eBay may buy 5% stake initially, valuing Snapdeal at $300m