In February 2016, Snapdeal stood at the pinnacle of India's e-commerce revolution. With a valuation of $6.5 billion, over 100 million registered users, and half a million sellers on its platform, founders Kunal Bahl and Rohit Bansal seemed destined to build India's answer to Amazon. Fast forward to December 2025, and the company—now operating under AceVector Limited—is filing for an IPO not to fuel growth, but to give exhausted investors an exit route from one of India's most dramatic startup collapses.
This is the story of how Snapdeal went from ruling India's e-commerce market alongside Flipkart to becoming a cautionary tale of missed opportunities, strategic missteps, and the brutal reality of competing against two US retail giants with virtually unlimited war chests.
Kunal Bahl and Rohit Bansal, two school friends from Delhi, founded Snapdeal in February 2010 as a daily deals platform—India's answer to Groupon. The timing couldn't have been better. India's internet penetration was accelerating, smartphones were becoming affordable, and a generation of consumers was ready to embrace online shopping.
Between 2013 and 2014, Snapdeal's growth was nothing short of meteoric. The company's gross merchandise value (GMV) reportedly grew by over 600% in a single year. The platform evolved from a coupon site into a full-fledged marketplace, attracting massive funding from global investors. Reuters
The crown jewel came in 2014 when SoftBank, led by visionary investor Masayoshi Son, pumped $627 million into Snapdeal—marking one of the largest investments in an Indian e-commerce company at the time. In August 2015, an even bigger consortium—Alibaba Group, Foxconn, and SoftBank—invested another $500 million. By early 2016, Snapdeal had raised over $1.8 billion in total funding and was valued at $6.5 billion.
At its peak, Snapdeal was locked in a tight three-way battle with Flipkart and Amazon for e-commerce supremacy in India. The company had successfully positioned itself as the value-conscious shopper's paradise, offering everything from fashion to electronics at aggressive discounts.
While Snapdeal celebrated its $1.8 billion in total funding, it was being dramatically outgunned. Amazon announced in 2016 alone that it would invest $5 billion into India, on top of the billions already deployed. Flipkart, meanwhile, had raised approximately $3.15 billion by 2016, dwarfing Snapdeal's war chest.
This funding disparity had devastating consequences. Amazon and Flipkart could afford to run deep-discount campaigns during festive seasons, subsidize logistics, and offer customer incentives that Snapdeal simply couldn't match. During the crucial 2016 festive season, Flipkart grabbed approximately 62% of GMV while Amazon captured 26%, according to Redseer data. Snapdeal's share had become negligible. The Brand Decoder
"Snapdeal found itself outgunned in an all-out funding war, which starved it of marketing firepower and scale against the big two," analysts later observed.
Snapdeal's aggressive expansion came at a crushing cost. In FY2016 (ending March 2016), the company's losses more than doubled to ₹3,316 crore (from ₹1,328 crore the previous year), even as revenue growth decelerated dramatically—from 450% to just 56%.
The company spent lavishly on infrastructure, logistics, and marketing. In September-October 2016, Snapdeal unleashed a ₹200 crore TV and branding blitz, complete with a new logo and celebrity endorsements. Yet despite this massive spending, it continued to lose market share to better-funded rivals.
In a desperate attempt to compete with Amazon's vertically integrated model and Flipkart's multi-platform strategy, Snapdeal went on an acquisition spree:
These diversions drained management focus and cash without delivering sustainable returns. While Amazon was perfecting Prime delivery and Flipkart was building Ekart logistics, Snapdeal was spreading itself too thin.
By mid-2017, Snapdeal was drowning. SoftBank, watching its investment evaporate, orchestrated merger talks with Flipkart. The deal, worth approximately $900-950 million, would have created India's largest e-commerce entity and given Snapdeal shareholders an exit.
But in a decision that would haunt the company, Snapdeal's board—reportedly under pressure from founders Kunal Bahl and Rohit Bansal and early investors Nexus Venture Partners and Kalaari Capital—walked away from the deal in July 2017. The company announced it would pursue "an independent path" with "Snapdeal 2.0." BBC News
The mathematics were brutal: Snapdeal had been valued at $6.5 billion in February 2016. Just 17 months later, the Flipkart offer valued it at barely $1 billion—a staggering 85% collapse. Yet the founders chose to go it alone.
"It is believed that the merger did not happen because of non-willingness of Snapdeal's founders and their earliest investors," later case studies revealed. ANU Books PDF
Ironically, just months after this deal collapsed, Walmart acquired 77% of Flipkart for $16 billion in May 2018—making it one of the largest e-commerce acquisitions in history. Snapdeal had missed its chance to be part of that story.
Walmart's acquisition of Flipkart in 2018 fundamentally changed the competitive dynamics of Indian e-commerce. Now Snapdeal faced not just Amazon's global might, but also Walmart's $500+ billion retail empire backing Flipkart.
The dual assault was devastating. Walmart brought:
Snapdeal, by contrast, had burned through investor patience. After walking away from the Flipkart merger, new funding dried up. SoftBank, its largest backer, had already written down over $1.4 billion in losses from its Snapdeal investment by May 2017, according to Economic Times reports.
As Amazon and Flipkart poured resources into expanding logistics, building private labels, launching grocery services, and offering same-day delivery, Snapdeal was cutting costs just to survive.
In July 2017, after the failed Flipkart merger, Snapdeal announced "Snapdeal 2.0"—a dramatic strategic pivot to focus exclusively on "value commerce" for India's price-conscious shoppers in Tier-II and Tier-III cities.
The company made brutal cuts:
The immediate impact was catastrophic. Revenue from operations plummeted from ₹1,158.9 crore (FY16) to ₹436.1 crore (FY18)—a 62% collapse in just two years. Business Today
Customers who had come to Snapdeal for variety and deals in electronics and smartphones found their favorite categories gone—and simply migrated to Amazon and Flipkart. The company had essentially destroyed its existing business to chase a narrower market that newer competitors like Meesho would ultimately dominate.
The recently filed Draft Red Herring Prospectus for AceVector (Snapdeal's parent) reveals the grim reality of the company's ongoing struggles:
While losses have improved from the FY2023 peak, the company has not achieved profitability despite years of cost-cutting. The Adjusted EBITDA margin improved from -44.82% in FY23 to -9.91% in FY25, but remains deeply negative.
Most tellingly, Snapdeal's core marketplace business is shrinking as a percentage of total revenue:
Meanwhile, the SaaS business (Unicommerce) has grown from 24.21% to 39.41% of revenues—essentially, the subsidiary is becoming more important than the parent marketplace that once defined the company.
The one bright spot in Snapdeal's portfolio has been Unicommerce, the e-commerce enablement SaaS platform it acquired in 2015. In August 2024, Unicommerce successfully went public with an IPO that priced shares at ₹108 and listed on August 13, 2024.
As of December 5, 2024, Unicommerce shares were trading at ₹119.51—well below the all-time high, but a successful exit nonetheless. AceVector sold 94.4 lakh shares of Unicommerce during the IPO, generating crucial capital that helped restore the parent company's net worth to positive territory after it had turned negative in FY2024.
Unicommerce is now the only listed entity in the AceVector portfolio and represents the company's most valuable asset—a bitter irony for a marketplace that once aspired to dominate Indian e-commerce.
On December 6, 2025, AceVector filed an updated Draft Red Herring Prospectus with SEBI for an IPO comprising:
The offer for sale tells the real story—this is an exit for tired investors:
According to the prospectus, the ₹300 crore fresh issue will fund:
Notably, the company may also conduct a Pre-IPO placement of up to ₹600 million, reducing the fresh issue size proportionally.
The harsh reality: Snapdeal is now a niche value e-commerce player targeting Tier-II and Tier-III cities, with:
The IPO is not about funding ambitious growth plans—it's about providing liquidity to investors who have been stuck for years in a declining asset. The fact that major backers like SoftBank and Nexus are selling in the offer for sale speaks volumes: after holding on through years of losses, they're finally getting a chance to exit.
By 2024-2025, the Indian e-commerce market has consolidated into a duopoly:
Amazon India and Flipkart (Walmart) together command an estimated 80-85% of the e-commerce market. Both continue to invest billions, expand into grocery and quick commerce, and leverage their global parents' resources.
Meesho, backed by SoftBank (ironically, the same investor that gave up on Snapdeal), has captured the value segment that Snapdeal once targeted. Using a social commerce model and zero-commission strategy for sellers, Meesho reported 135% YoY order growth in late 2022 and even achieved profitability by mid-2023—overtaking Amazon to capture the second-highest number of orders during festive seasons.
Snapdeal, meanwhile, is a distant also-ran, operating in the shadows of giants with a fraction of its former glory.
Snapdeal's collapse offers several crucial lessons:
Cash is king in e-commerce wars: Without the capital to match competitors' spending on logistics, marketing, and customer acquisition, even early leaders get crushed
Strategic focus matters: Snapdeal's diversification into payments, logistics, and multiple verticals diluted focus while better-capitalized rivals perfected their core competencies
Know when to exit: Walking away from the Flipkart merger at $900-950 million proved catastrophic when the company is now worth far less
Pivots must preserve the core: Snapdeal 2.0's abandonment of high-value categories alienated existing customers without successfully capturing the new target market
Global giants with patient capital win: Amazon and Walmart can sustain losses indefinitely while building market dominance—local startups cannot
As Snapdeal prepares for its 2025 IPO, the journey from $6.5 billion valuation to investor exit vehicle is complete. What was once India's great e-commerce hope—a homegrown competitor that could take on global giants—has become a sobering reminder of how quickly fortunes can change in the brutal world of Indian e-commerce.
The founders, Kunal Bahl and Rohit Bansal, still hold significant stakes (12.42% and 11.14% respectively) and remain committed to the business. But the company they built no longer competes in the same league as Amazon and Flipkart. Instead, it survives in a narrow niche, dependent on the success of a subsidiary (Unicommerce) that has ironically become more valuable than the parent company's core marketplace business.
For investors who poured $1.8 billion into Snapdeal's dream of dominating Indian e-commerce, the upcoming IPO represents not a victory lap, but a long-awaited exit from one of India's most dramatic startup failures.
The question now is whether public market investors will see value in a struggling marketplace with persistent losses, or whether this IPO will simply mark the final chapter in Snapdeal's fall from grace.
