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Ratan Tata invests in Snapdeal.com

  • HT Correspondent, Hindustan Times, Bangalore
  • Updated: Aug 27, 2014 22:54 IST

India’s fast-growing e-commerce sector has got a thumping endorsement from none other than Ratan Tata.

The chairman emeritus of the salt-to-software Tata Group has made an undisclosed personal investment in India’s second-largest e-commerce company, Delhi-based Snapdeal.

Before Tata, Wipro chairman Azim Premji had invested in Snapdeal and online apparel seller Myntra, which was subsequently acquired by Flipkart.

“An investment by a legendary and respected figure like Tata is an excellent validation of our focussed strategy on building a long-term enterprise,” Kunal Bahl, co-founder and CEO of Snapdeal said in a statement.

Tata’s investment in Snapdeal comes amid an intense three-cornered contest between homegrown Flipkart, Snapdeal and the US-based Amazon for the pole position in India’s $2.3-billion e-commerce market. It is poised to grow eight times in the next five years, according to studies.

The 7 year-old Flipkart recently raised $1 billion in funding that took its valuation to $7 billion, while Amazon, announced $2-billion investment in expanding its operations in India.

“Snapdeal has grown over 600% year-on-year for the last two years. This investment by Tata is of great significance to the company and stands testimony to the growth and success seen by the company in a short span of 4 years,” Bahl said.

Tata did not made any statement on his investment, and could not be contacted. Industry experts, however, said his investment would be fairly small. “It may not be a big amount.

It is more an endorsement. But this has signalled that e-commerce is a big opportunity for investors,” said Harish HV, partner, Grant Thornton, who tracks Internet businesses in India.

The announcement of Ratan Tata’s investment in Snapdeal comes a day after the company entered into a partnership with Tata Housing to launch a real estate vertical. “For Snapdeal, this investment will definitely gain access to Tata companies, which will lead to business partnerships,” Harish said.

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