Skip to main content

[ Summary of Snapdeal Crisis ] - Snapdeal Times

By The Summarizers
Snapdeal, being a re-organized, focused & entrepreneurial company now facing uncertainties & struggling in operating its business. The reasons behind this fruitful journey to the mess is covered in the below tiny article :

In 2016-17, Snapdeal was struggling in raising funds from the investors but continued spending money on the variable costs which led to Cash Crunch.


Kalaari capital & Nexus ventures are joint ventures (JVs) firms who make funding in leading companies and so as invested in Snapdeal too. SoftBank also was another biggest investor holding 33% ownership. Few months later, partnership between these two biggest investors didn't go well and contradictions were initialized on the basis of Board seats. SoftBank had two seats giving more power & rights in the company. Kalaari and Nexus were holding one seat each.

Storm did not stop here. Freecharge, e-commerce website for recharges, bill payments & much more, owned by Snapdeal was also sinking. Freecharge didn't bother to stop giving offers massively to customers in fear of losing money lenders & transferors. In a few months, the subsidiary reported losses.

To face these difficult times, SoftBank committed to Snapdeal for funding into the company but no such deal was materialized because Snapdeal wanted funding on their own terms (in other words, they wanted flexibility). Sales in the 1st Quarter dropped severely, jobs were cut down and shut Shopo ( Snapdeal's online marketplace for handicraft products).

These continuous shocks were never imagined by anyone. 

The Last Lines :~

Snapdeal should have accepted SoftBank's terms & conditions to get the company on track. Giving offers and cashback better than others may deem to be a good business strategy for 'Freecharge' but also they should have taken care of their reserves at the same time. 'Shopo' sales analysis was done late which led to shutting the business at the wrong time.
Hope you liked our first article on this Blog !

Stay Classy !

Labels:
Location: New Delhi, Delhi, India

Comments

Post a Comment

Popular posts from this blog

Finance in Medicare | Digital Health | Merger Acquisition in Healthcare sector

By The Summarizers
Patients are the source of Revenue and a kick to a whole process in the Medicare industry. Solely from the Registration formality and insurance vendors, a margin is secured to earn a six letter word - "Profit". Taking decisions to employ that 6 letters into various costs transformation efforts like Merger Acquisition, Risk control and Digitization with the help of Finance makes this sector to run & compete with others. Next time you go to a Hospital, you will think how each individual is contributing and the source of earning post reading this summary. We would also differentiate the meaning of Healthcare Financing vs Finance in Health care as both the words looks similar but they are not. Why not start with this itself ;) Healthcare Financing refers to arranging working capital (money to run the business or operations) for continuity of production lines and procuring new machinery and technology whereas Finance in Healthcare works as a backbone in terms of accounti...
15 comments
Read more

Top 6 sectors affected due to COVID-19 outbreak | Part 1

By The Summarizers
It was the Great Recession aka 2008 Financial crisis and we 90s Kids are again watching a similar recessionary crisis. Each individual in the world knows how a distinctive emergent virus can cause illness to every part of the human body. It is not the time of blaming any economy but how to survive in this new challenge.  The Summarizer team took an initiative to publish a series of Impact and Outcome evaluation in summarized manner from C-19. In our first article, we are going to talk about three industry sectors affected the most in India & around the globe.
9 comments
Read more

NPA as per RBI (in summary)

By The Summarizers
As per Reserve Bank of India (RBI),  an asset , including a leased asset , becomes NPA (non performing asset) when it ceases to generate income for the bank. BEFORE 2014 Also, it was defined as  a Credit Facility in respect of which the interest / installment of principal   has remained ' past due ' for a specified period of time. 'Past Due' means amount not been paid within 30 days . And it becomes NPA, if amount not paid within 90 days . FROM & AFTER 2014 As per the new guidelines (26/02/2014) of RBI, before a loan account turns into a NPA, banks are required to identify the stress into the account by creating 3 sub-categories under Special Mention Account (SMA) category . SMA Sub-Categories  # Revitalising Distress  Assets in the economy -- Guidelines on Joint Lender Forum (JLF) & Corrective Action Plan (CAP)
Post a Comment
Read more