Snapdeal snaps $500 million funding from Alibaba, Foxconn and SoftBank

India’s fastest growing online portal, Snapdeal has revealed that China`s Alibaba Group Holding, Japan’s SoftBank Group Corp. and Foxconn will together invest $500 million as Snapdeal is poised to expand in the fast-growing e-commerce sector.

The move once again signifies the importance of India and a vote of confidence from three leading technology companies in Snapdeal. Snapdeal had earlier in October got a $627 million from SoftBank. SoftBank was also an earlier backer of Alibaba.

Snapdeal, which models itself as the Indian version of Alibaba, did not break out on individual investments. Ebay Inc. was an earlier backer of Snapdeal, and it will be selling a part of its stake in the transaction, which will also entail some fresh funding.

Present investors, Temasek, BlackRock, Myriad and Premji Invest also contributed to the coffers of Snapdeal though it did not give any details. Ebay had in a statement said that it has sold a portion of its stake and now will concentrate on spreading its own business in the country.

FIH Mobile, which is a subsidiary of the Taiwan`s Foxconn which is the trading name of Hon Hai Precision Industry Co. in a statement said that it will be buying 4.27% of stake in Snapdeal for $200 million through its Singapore registered subsidiary Wonderful Stars Pte.

Reuters quoting sources said that transaction would increase the value of Snapdeal to more than $5 billion.

The Indian market is worth $22 billion, and it is fought between three players all vying for a piece of the cake. It includes Snapdeal, which rivals Flipkart valued at $15 billion and Like it rivals Snapdeal sees most of its trading on smartphones and mobile devices.

Foxconn said in a statement that most of the e-transactions are done via mobile devices, and the investment gives an opportunity for FIH to benefit from Snapdeal’s platform.