Nikesh Arora's exit not to affect Snapdeal: CEO

BENGALURU: To douse anxiety and calm the jangled nerves of Snapdeal employees after Nikesh Arora’s surprise exit from SoftBank Group, company founder and CEO Kunal Bahl has shot off an email trying to assure them that Arora’s exit will not have an adverse impact on Snapdeal. SoftBank is the largest shareholder in the online marketplace with over 30% stake in the company.

TOI has reviewed the e-mail Bahl sent to the employees. Of all of SoftBank’s India investments, Snapdeal finds itself caught in the spotlight, much more than others, as it operates in the most competitive of environments. It needs the Japanese giant to be firmly in its corner if it has realistic ambitions of taking the fight to its better-funded rivals.


“While Nikesh’s departure from SoftBank is a loss, I want to assure everyone that we continue to be fully supported by SoftBank, strategically and financially,” Bahl said in his communique. Arora is believed to have been a major backer of Bahl and his co-founder Rohit Bansal. In fact, sources suggest that he had offered to support Snapdeal with quarter-on-quarter investments as it faces fierce competition from bigger rivals with more muscle power—Flipkart and Amazon.“Nikesh will continue to be involved with advising us in all our key initiatives, as he has been doing over the last 18 months. Masa-san, SoftBank’s founder and CEO, has assured me of SoftBank’s complete support in all our initiatives, in the same exact way that they have been supportive since the time they made their first investment,” he added in the e-mail.

According to sources, the company has been under stress as it has been losing market share to rivals Flipkart and Amazon. Further, the company has not been able to raise fresh capital as the broader fund raising market has become cautious in the last 10-12 months. It has been actively looking to bring down operational costs including letting go over a thousand people from its non-core operations. The company had then termed it as ‘performance improvement plan (PIP)’ and not laying off.

A Snapdeal spokesperson did not respond to an email sent by TOI today.

Snapdeal has so far raised about $1.5 billion compared to Flipkart's $3.2 billion. American e- commerce giant Amazon has put more pressure on the company after announcing additional investment of $3 billion taking its total investment in the Indian market to $5 billion.


Snapdeal recently completed a $200 million financing round in February but that was mostly in the form of secondary transaction. It got primary capital infusion of Rs 335 crore during that time. A secondary sale is when an existing investor sells shares to a new one but the money does not come into the company's accounts.

According to industry watchers, with Arora leaving SoftBank, Snapdeal has all the reasons worry and get its house in order if it wants to remain a serious contender in India's hyper competitive e-commerce space.