Snapdeal's financials are out. In FY24 (its 14th), the company made a net loss of ₹160 Cr at a revenue of ₹384 Cr. If you listen closely, Snapdeal is arguably the most interesting startup story of our times.
Founded in 2010, Snapdeal first began as "Groupon for India". That was a good move, considering that scheme was really hot back then. But then Groupon went through its own meteoric rise and fall very quickly, and Snapdeal pivoted to the next hot thing - pure play E-commerce. Terrific move, once again.
After venturing into Ecomm, Snapdeal raised an unbelievable amount of money. By 2014, it had mopped up over $250 Mil. By '17, the figure had reached $1.6 Bil (some ₹14,000 Cr). At one point, Snapdeal was as hot as Flipkart, but times changed as they often do. And since then, the company went on to post cumulative losses of around ₹11,500 Cr. But even then, the business never really flew. At all.
Just think about it. The company raised about $1.8 Bil throughout its history. And in the 14th year of existence, after burning $1.5 Bil, has a business of about $44 Mil in sales? And that too with negative net and almost zero growth?
But I began the post saying it's the most interesting startup story of our times, right? Yes. Because despite Snapdeal's unfortunate failures, the founders are incredibly (and undeniably) successful. How can founders be successful if the startup itself didn't work? That's exactly the logic which companies like Snapdeal and entrepreneurs like Mr. Bahl left behind. Entrepreneurship in the times of VC funding, has little to do with "skin in the game". In the west, Adam Neumann epitomised this. In India, we got Mr. Bahl.
Consider this: Having lost over ₹11,500 Cr, Snapdeal still saved about ₹2,000 Cr in the bank. How? By selling the companies it once acquired at 80% haircuts, as soon as the VCs stopped giving new money. And then? Founders of Snapdeal started a pretty good VC firm through which they looked for startups with "solid unit economics". Those investments did well and may have netted them some $200 million.
So essentially, founders of Snapdeal, who were paid by VCs to grow Snapdeal, sold parts of Snapdeal to fund other startups, all while also taking a hefty salary (5 to 50 Cr/year). And the best part is that all of this happened while the company bled money like a character in a Tarantino film.
Now all this might sound bizarre to an old folk. Absolutely unbelievable. But guys, "Agar investor-entrepreneur hai raazi, to kya karega qaazi?".
But there comes the final twist. Investors wanted to sell Snapdeal to Flipkart in hopes of someday seeing their money back. But founders blocked that as well by some crazy maneuvers, essentially hacking the very fabric of the VC funding ecosystem like kings. Inspiring!
Interestingly, Snapdeal, in a way, also gave The Great Kunal Shah a career. Freecharge was acquired by Snapdeal for $400 million, and then sold to Axis Bank only a year later for $60 Million. So cool.
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