Snapdeal Founders' Letter to Employees All but Confirms Imminent Sale

Snapdeal Founders' Letter to Employees All but Confirms Imminent Sale
Highlights
  • Snapdeal has been rumoured to be close to sale for some time
  • A letter by the founders all but confirms this rumour
  • Flipkart is said to be the buyer, but there’s nothing official just yet

It's no secret that Snapdeal has been having a rough year. Layoffs might be a "common occurrence" in India's e-commerce ecosystem, but Snapdeal had to let go of around 600 people in February, while Snapdeal-owned FreeCharge CEO Govind Rajan left the digital payments firm. Then it came to light that Snapdeal founders Kunal Bahl and Rohit Bansal had written to the employees announcing they are taking a 100 percent salary cut.

Over the last one month and a half, the future that lies ahead for Snapdeal has been subject of intense speculation. There have been reports that Flipkart will be acquiring Snapdeal, in a deal that's being pushed through by SoftBank, one of the biggest investors in Snapdeal.

On Sunday, in a letter that can be seen to all but confirm the imminent sale - whether to Flipkart or another party - the founders have written to the Snapdeal employees assuring them that their [employees'] well being is the top priority.

In the letter sent to all employees the founders write: "While our investors are driving the discussions around the way forward, I am reaching out to let you know that the well-being of the entire team is mine and Rohit's top and only priority."

"We will do all that we can, and more, in working with our investors to ensure that there is no disruption in employment and that there are positive professional as well as financial outcomes for the team as the way forward becomes clear," the letter adds. It also promised that with the review process nearly complete raises will be announced in the next two weeks, and that overall increments will be higher than those offered in 2016, because of the "incredible progress" that the company has made, which is an interesting choice of words considering the alleged impending sale of the company.

Of course, if the speculation is correct and Flipkart ends up being the acquirer of Snapdeal, it's unclear what will follow for many of these employees, and indeed what will follow for Snapdeal as a brand. Flipkart acquired fashion brand Myntra in 2014, and the two largely continue to act separately. Snapdeal is a more direct competitor, so it's not certain what would happen.

Most are speculating is that SoftBank will be buying out Snapdeal's other stakeholders, and doing an all-stock transaction with Flipkart; and that it [Softbank] will also invest in Flipkart in a secondary transaction. It’s worth pointing out that Flipkart has reportedly been looking for fresh investment for quite a while.

Another SoftBank company, Housing.com, merged with PropTiger reportedly in a move pushed through by SoftBank. At the time, the CEO of the company was Jason Kothari, who had been brought in by the investors after the founder-CEO Rahul Yadav left the company in a messy breakup. After Housing.com's merger/ sale, Kothari moved on to another SoftBank company - Snapdeal, where he was named FreeCharge CEO a month ago.

Coming to the Flipkart-Myntra deal from 2014, common investors included Access Partners, Tiger Global, and Sofina. According to reports at the time, that deal was also championed by investors to drive synergies. Clearly, the more things change, the more they remain the same.

You can read the full text of the Snapdeal letter below:

Dear Team,

There has been a lot of media reporting and speculation around Snapdeal recently.

While our investors are driving the discussions around the way forward, I am reaching out to let you know that the well-being of the entire team is mine and Rohit's top and only priority. We will do all that we can, and more, in working with our investors to ensure that there is no disruption in employment and that there are positive professional as well as financial outcomes for the team as the way forward becomes clear. Let me repeat, your well-being is our #1 priority.

In the interim, the annual performance review process is nearly complete and you will the receive the salary revision and promotion letters (where applicable) over the next two weeks. Given the incredible progress we have made around our profitability journey as a company, the overall increments this year are higher than those offered last year.

Please do feel free to reach out with your suggestions and concerns. Stay awesome!

Thanks!

Kunal & Rohit

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