Snapdeal-Flipkart Deal has collapsed as the former’s co-founders want to pursue an independent path. The move will come as huge setback for Softbank.
Snapdeal has officially called off the acquisition deal with Flipkart, according to an official statement released by the Gurgaon based e commerce company on Monday. The statement specifically stated that Snapdeal will now pursue an independent path, potentially implying that the company will not consider any more accusation offers.
The news of the deal falling apart comes barely after four days Jasper Infotech, the parent company of Snapdeal, agreed to sell its e-commerce business to Flipkart for about $900 million. However, not all was well about this deal as the only party that supported this proposed agreement was Softbank – the largest investor in Snapdeal. On the other hand, the other investors including the co-founders – Kunal Bahl and Rohit Bansal – were staunchly opposed to selling their company to the Bengaluru based arch rival.
Bahl and Bansal’s still have faith in Snapdeal
Amid Softbank’s continuous efforts to merge Snapdeal and Flipkart, Bahl and Bansal reportedly never stopped showing faith in the company that they painstakingly started in 2010. However, both co-founders are more interested in running a stripped down version of the present company, as this would require less capital and workers. Both have reportedly named this smaller company as Snapdeal 2.0.
According to reports, what has helped to fuel both co-founders new found ambition is the successful sale of Freecharge to Axis Bank last week for $60 million. The sale brought much needed capital to both partners, which they will supposedly pump into Snapdeal. Both are also expecting further capital infusion by selling their stake in another subsidiary company Vulcan Express.
Softbank faces a huge setback
The failure of Snapdeal-Flipkart deal would entail in a huge setback for Softbank. The Japanese investment giant for several months had been trying to break a deal between the two companies. Softbank’s desperation is understandable, given that any deal would end up giving it a stake in Flipkart. This would not only have helped Softbank in salvaging its failed investment in Snapdeal, but also earn handsome profit in future.