Sources say Foxconn Chairman Terry Gou convinced Alibaba’s Jack Ma to invest together, rather than separately
Chinese e-commerce giant Alibaba and Taiwanese electronics contract manufacturing company Foxconn Technology Group, are reportedly in talks to jointly invest about $500 million in Snapdeal, a deal that could value the Indian e-commerce company at about $5 billion.
According to the Wall Street Journal, the two companies are planning to invest together in Snapdeal for a combined 10 percent stake. However, the deal still needs regulatory approval in India.
People familiar with the development said that Foxconn Chairman Terry Gou convinced Alibaba’s Jack Ma to invest together, rather than separately.
Last year Snapdeal was valued at roughly $2 billion when it raised $627 million from Japan’s SoftBank. eBay and BlackRock are the other major investors in the e-commerce player. It is also noted that Alibaba gave up an earlier deal over differences in Snapdeal’s valuation.
Snapdeal: gateway to India
Snapdeal is raising significant rounds of investment to compete with rivals Flipkart and Amazon. It also needs more monies as the e-commerce player is on an aggressive acquisition spree. Early this week, the company acquired mobility solutions startup Letsgomo Labs to improve its mobile technology capabilities.
The WSJ report points out that with a stake in Snapdeal, Foxconn could give its clients a sales channel in the country. The Taiwanese major is also said to be looking to develop a logistics operation, apart from a funding platform for Indian startups in an attempt to diversify its portfolio.
Foxconn Technology Group is aiming to develop 10-12 facilities in India, including factories and data centers, by 2020. The company separately announced with Taiwanese firm Innolux that it was looking at investment opportunities in India.
Alibaba, on the other hand, has already started making investments in India and a stake in Snapdeal will help in gaining a strong foothold in the Indian market.
This post was originally published on e27.