Snapdeal’s go-to man for fundraising quits amidst mild investor interest

Amidst fundraising troubles and cost-saving measures, Snapdeal’s two senior executives have quit the firm. Abhishek Kumar, who was the head of corporate development and responsible for fundraising, has resigned.

Sandeep Komaravelly, senior vice-president for Snapdeal’s mobile customer-to-customer marketplace Shopo, also resigned in January. Abhishek will be replaced by high-profile recruit Jason Kothari, who was earlier put in change of reviving beleaguered Housing.

The exits have come after the SoftBank-backed startup said in November that it will shuffle its senior management. The program kicked off with Vishal Chadha, who was overseeing Snapdeal’s seller network. He was re-designated as the head of business, categories, brand alliance, and services. Grabbon co-founder Tony Navin was made senior vice president of partnerships and strategic initiatives, and vice president Anubhav Goyal was given charge of the price analytics team.

Snapdeal’s vice president of design Harish Sivaramakrishnan quit in November to join Google India, while Anand Chandrasekaran, chief product officer, quit in May to join Facebook.

Abhishek, who has been with Snapdeal for close to three years, also oversaw the US$400 million acquisition of FreeCharge in 2015. Shopo, headed by Sandeep – which failed to create any interest in the market – was later merged with Freecharge.

Sandeep is leaving to start his own venture, the company spokesperson said. He joined Snapdeal when the ecommerce startup acquired his group-buying website Grabbon in 2010.

Snapdeal has been in talks recently with existing investor SoftBank to raise money at a valuation of US$3-4 billion, after it failed to do so at an earlier valuation of US$6.5 billion in February last year.

“The last few months have been challenging for Snapdeal with Amazon increasing their marketing spend and gaining market share, and Flipkart trying very hard to retain the leading market share position,” says Satish Meena, analyst at Forrester Research.

In November, investor SoftBank wrote off a total of US$550 million in two of its largest startup investments in India – Ola and Snapdeal. SoftBank has invested close to US$2 billion in India until now, and the majority of its funds, about US$1.3 billion, has been deployed in Ola and Snapdeal. SoftBank also has investments in hotel booking platform Oyo Rooms, grocery delivery app Grofers, and real estate classifieds player Housing.

In FY16, Snapdeal incurred a loss of US$490 million, higher than US$197 million the previous year.

The company has been struggling to arrest its cash burn and has moved around senior executives internally across Snapdeal, FreeCharge, and logistics arm Vulcan to streamline the company in face of stiff competition from Flipkart and Amazon.

At the end of March, Flipkart had a market share of 37 percent, down from 43 percent in the previous year, while Snapdeal’s market share fell to 15 percent, from 19 percent. The gainer was Amazon, which increased its market share to 24 percent, from 14 percent.

Snapdeal has been dealing with high costs for the past year and has implemented several cost-cutting measures to tackle it. The startup has rolled back discounts to preserve cash.

Interestingly, on Monday its co-founder Kunal Bahl said the startup is set to turn profitable in two years. “We are not in active fund raising mode right now,” the company said in an email response to Tech in Asia.

source: Tech In Asia