No Snapdeal sale to Flipkart for now as SoftBank fails to convince board

SoftBank, which is trying to pull off the biggest consolidation in the Indian e-commerce ecosystem, again failed to convince the board of directors of Jasper Infotech Pvt Ltd, owner of Snapdeal, to sell the online marketplace to Flipkart.

The Tokyo-based telecom and investment major holds the largest 33 per cent stake in Snapdeal.

According to three sources privy to the development, the meeting, which went on for more than three hours, was not able to reach a consensus as the board of directors, including Kunal Bahl and Rohit Bansal, did not agree to the terms of the deal.

While SoftBank is making every effort to persuade other directors, especially the ones representing early stage investors Kalaari Capital and Nexus Venture Partners, they are not agreeing to the deal.

While some sources said most of the directors did not agree to the terms of cash and stock deal, which included selling around 10 shares of Snapdeal for every one share of Flipkart, others said such an arrangement was not discussed. Till now SoftBank has not managed to bring on board Kalaari and Nexus to sell off their stake in Snapdeal as they think the valuation for Snapdeal being pegged is unreasonably low. Also, SoftBank Group Corp’s Lydia Bly Jett has joined the board of Jasper Infotech.

SoftBank, which invested around $900 million in Snapdeal and is the major stakeholder in the company as well as digital payments platform Freecharge, has sent Jett as an additional director.

According to company documents sourced from Tofler, SoftBank Group’s chief operating officer Jonathan Bullock resigned from the board in February 2017 followed by the appointment of managing partner Kabir Misra on 10 March. Jett’s appointment is the third board movement from SoftBank to Snapdeal. The move comes at a time when the company is facing financial woes of its own. (READ MORE)

We messed up: Full text of what Kunal Bahl wrote to Snapdeal employees

Latest Business News - Exploring ways to optimise costs and rewrite its success story, Online marketplace Snapdeal has confirmed that it is undertaking layoffs within the company. Snapdeal co-founders Kunal Bahl and Rohit Bansal in an email to employees on Wednesday said they have had to take tough decisions to retain the company's profitability, which include - employee layoffs, 100 per cent salary cut for themselves, among others.

Quoting Zig Ziglar, Kunal said, "When obstacles arise, you change your direction to reach your goal, you do not change your decision to get there."

According to The Economics Times, here are key highlights of Kunal Bahl's email to Snapdeal employees:

* Snapdeal probably holds the record for the company that got written off the most number of times by Internet pundits.

* Have our company and industry been going through a troubled time? Absolutely. Did we make errors in our execution? No doubt about that(Read More)

Amid 600 job cuts, Snapdeal founders take 100% salary cut

Latest Business News - Snapdeal co-founders Kunal Bahl and Rohit Bansal have taken a 100 per cent salary cut, while many others at the firm have "proactively" offered significant reduction in compensation.

The SoftBank-backed firm, which has been struggling to raise fresh funding, is also laying off hundreds employees and eliminating non-core projects to focus on "profitable growth".



In an e-mail to employees, Bahl conceded that over the last 2-3 years, with all the capital coming into this market, the company and the entire industry "started making mistakes".

"We started growing our business much before the right economic model and market fit was figured out. We also started diversifying and starting new projects while we still hadn't perfected the first or made it profitable. We started building our team and capabilities for a much larger size of business than what was required with the present scale," he said.

Bahl cited examples of global companies like Apple, Tesla, Amazon, Netflix, Lego and Spicejet that "painted themselves into a corner many times over" before they became successful.(Read More)