May 09, 2017 03:23 PM
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Snapdeal was founded in 2010 by two IIT graduates. They started as selling books in the initial stage. However, they have a more than 10 million products in their catalogue at present and shipping to more than 5000 towns and cities in India. They currently have more than 275, 000 sellers on their platform.
As we all know with the dawn of the online marketplace a number of companies have established themselves selling everything needed by human race. The main reason of their success is FDI( Foreign Direct Investment). So, far Snapdeal is successful in getting 11 rounds of funding from the leading Investors all over the world. Their leading investors includes Softbank Corp, Chinese giant Alibaba group, Bessemer Venture partners and ebay to name a few.
As Snapdeal has raised millions of dollars in Investment from time to time, that has only made it an ambitious company instead of a profitable one. With these funds snapdeal bought a vast office space for their employees and the number of staff increased by every passing day. By 2016 there were only 3 companies that were competing for a monoply in the online market and along with Snapdeal, Flipkart and Amazon were in the race. Also, Snapdeal Aquired a large of companies spending millions of dollars for each aquisition. For many of these aquisitions Snapdeal failed to make them a profitable venture and was left with no option but to shut them down.
Amazon and Flipkart were quite successful in raising funds from time to time on the other hand Snapdeal was not able to find a single Investor and started facing financial crisis. With each passing day their funds were drying and they are finding it difficult to keep the staff whom they hired without a proper business plan in place. Since last 2 years Snapdeal has layoff hundred of their staff as they were not able to pay them on time. Also, they have to reduce their office space as they donot have funds to pay rent for these hi-tech offices.
So, As we hear the latest news Amazon and Flipkart are in the race now to aquire Snapdeal and it will be of no surprise if either of these companies aquire Snapdeal in the near future. So, with the story of Snapdeal all the online companies should learn to be frugal with their funds and try to be more profitable instead of offering higher discounts and not only to focus to build a huge customer base.
