In July 2017, IndianWeb2 reported that the logistics arm of online marketplace Snapdeal’s Vulcan Express is soon going to acquired by express distribution and supply-chain companies, Gati, Peepul Capital and TVS Logistics.
With this acquisition, Snapdeal looks to gain about Rs 100-120 crore from the sale of its logistics unit, Vulcan Express. There are no buyers yet. And given Snapdeal’s knack of dilly-dallying, that could take longer as well.
But now, here comes the another development from the e-commerce major. According to filings with the Registrar of Companies, the Vulcan Express has received $23.7 million) from its parent, Snapdeal.
According to Vccircle report, the company raised the sum by allocating 15.24 crore equity shares at Rs 10 apiece to Jasper Infotech Pvt. Ltd, which operates Snapdeal, on 7 August.
The new funding round comes even as Snapdeal is reportedly trying sell off Vulcan Express.
In early August, it had come to light that Snapdeal was looking at a price tag of Rs 200 crore for Vulcan. A sale was expected to happen in 30-40 days. However, there no response has been received on the same.
According to industry experts, the current infuse into Vulcan possibly means a sale may not happen anytime soon. It also indicates Snapdeal’s intent to reconsider its original objective of building a profitable business in Vulcan.
Vulcan Express was the result of Snapdeal’s decision to build its own logistics arm, after its moves to acquire GoJavas did not materialize. Snapdeal, which had acquired a 42% stake in GoJavas in 2015, pulled out its business after instances of large-scale financial irregularities. GoJavas was later acquired by Pigeon Express.
In FY16, Vulcan Express posted a huge jump in net revenue to Rs 184 crore, up from Rs 26.7 crore in FY15. However, losses also widened six-fold to Rs 20 crore from Rs 3.2 crore in FY15. The company is yet to file its financials for FY17.
As part of the Snapdeal 2.0 strategy, which the e-tailer charted after its merger talks with Flipkart hit a dead end, It is looking to pivot to a pure play marketplace model. It will lay off a chunk of its workforce in the process. Shedding off its associated entities FreeCharge, Unicommerce and Vulcan was also reportedly part of the strategy.
Snapdeal is technically the first Unicorpse Startup of India as the troubled start saw its valuation falling down from $6.5 billion to less than $1 billion in a year or so.
Snapdeal now has cash reserves of Rs 385 crore ($60 million) from Axis Bank to which it sold its payments unit, FreeCharge.
Notably, a number of mistakes founders of Snapdeal had made can possibly make them the ‘Yahoo’ of India as by rejecting the $900 million merger offer from Flipkart can cost them a more setback in terms of valuation in future. But with this infuse, it looks like that e-commerce major is trying to rework on its mistakes.
With this acquisition, Snapdeal looks to gain about Rs 100-120 crore from the sale of its logistics unit, Vulcan Express. There are no buyers yet. And given Snapdeal’s knack of dilly-dallying, that could take longer as well.
But now, here comes the another development from the e-commerce major. According to filings with the Registrar of Companies, the Vulcan Express has received $23.7 million) from its parent, Snapdeal.
According to Vccircle report, the company raised the sum by allocating 15.24 crore equity shares at Rs 10 apiece to Jasper Infotech Pvt. Ltd, which operates Snapdeal, on 7 August.
The new funding round comes even as Snapdeal is reportedly trying sell off Vulcan Express.
In early August, it had come to light that Snapdeal was looking at a price tag of Rs 200 crore for Vulcan. A sale was expected to happen in 30-40 days. However, there no response has been received on the same.
According to industry experts, the current infuse into Vulcan possibly means a sale may not happen anytime soon. It also indicates Snapdeal’s intent to reconsider its original objective of building a profitable business in Vulcan.
Vulcan Express was the result of Snapdeal’s decision to build its own logistics arm, after its moves to acquire GoJavas did not materialize. Snapdeal, which had acquired a 42% stake in GoJavas in 2015, pulled out its business after instances of large-scale financial irregularities. GoJavas was later acquired by Pigeon Express.
In FY16, Vulcan Express posted a huge jump in net revenue to Rs 184 crore, up from Rs 26.7 crore in FY15. However, losses also widened six-fold to Rs 20 crore from Rs 3.2 crore in FY15. The company is yet to file its financials for FY17.
As part of the Snapdeal 2.0 strategy, which the e-tailer charted after its merger talks with Flipkart hit a dead end, It is looking to pivot to a pure play marketplace model. It will lay off a chunk of its workforce in the process. Shedding off its associated entities FreeCharge, Unicommerce and Vulcan was also reportedly part of the strategy.
Snapdeal is technically the first Unicorpse Startup of India as the troubled start saw its valuation falling down from $6.5 billion to less than $1 billion in a year or so.
Snapdeal now has cash reserves of Rs 385 crore ($60 million) from Axis Bank to which it sold its payments unit, FreeCharge.
Notably, a number of mistakes founders of Snapdeal had made can possibly make them the ‘Yahoo’ of India as by rejecting the $900 million merger offer from Flipkart can cost them a more setback in terms of valuation in future. But with this infuse, it looks like that e-commerce major is trying to rework on its mistakes.
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