Snapdeal's fate remains in suspense: 5 struggles of India's start-up poster boy

The three biggest investors of India's e-commerce firm Snapdeal are now inching closer to change the company's detoriating fate completely.

Japan's SoftBank, Kalaari Capital and Nexus Venture Partners would likely to come up with a plan which would clear the way for a sale of the e-tailer to one of its rivals, Flipkart or Paytm, reports Mint.

Citing the sources, the newspaper report said that at a board meeting of Jasper Infotech, the company behind Snapdeal, on Tuesday, SoftBank showed interest in buying a part of the stake owned by Kalaari and Nexus.

ALSO READ: SoftBank preps Snapdeal for sale, looks to buy Kalaari, Nexus stakes

However, a spokeswoman for Snapdeal said no decision has been taken by the board on any matter thus far.

Indian online retailer Snapdeal is looking to raise just over $100 million from existing shareholders including Japan's SoftBank and new investors, its chief financial officer said.

But what really happened to the country's online marketplace which was once India's start-up poster boy? The answer lies in these five struggles the firm is dealing with currently.

The company, which last year lost its second place in India's fiercely competitive online retail market to Amazon.com Inc, aims to become profitable in two years but faces falling cash reserves.

• Founded in 2010, has seen 12 rounds of funding, raising a total equity funding of $ 1.7 billion, according to the data from Tracxn. It has been struggling to raise funds fresh funds recently, with $221 million raised in 2016 compared to $ 500 million raised in 2015.

• Snapdeal has also suffered a devaluation, valuations went down to $4 billion currently from $6.5 billion in February 2016. The top-level exits continued at Snapdeal with Anand Chandrasekharan, Chief Product Officer; Tony Navin, Head of Partnerships and Strategic Investments; Abhishek Kumar, responsible for the acquisition of FreeCharge mobile wallet; and Sandeep Komaravelly, head of mobile customer-to-customer marketplace Shopo, leaving the company.

• It plans to sell its digital wallet FreeCharge which it acquired in April 2015. Another acquisition which did not pay-off was Exclusively.in, a premium fashion platform which shut down within 18 months of acquiring it. Four years after buying it in 2013, Snapdeal shut down its C2C marketplace Shopo.

• The ill health of the company can easily be diagnosed from its mounting losses which significantly jumped over 120 per cent in 2015/16 to Rs (-) 2,960 crore from Rs (-) 1,319 crore in 2014/15. In the past five years, Snapdeal burnt up Rs 4,745.5 crore in losses and write-offs.

• Its employees expenses, the next biggest expense head of the company after advertising expenses, shot up around 148 per cent to Rs 911 crore in 2015/16 from Rs 367.19 crore in the previous fiscal.  Clearly, mounting employee expenses, proved to be the Achilles heel for the company.