MUMBAI 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.
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.
CFO Anup Vikal said Snapdeal has enough cash for this year, after sources told Reuters last month that the company was seeking investment to shore up its finances after unsuccessful talks with Chinese funds and existing investor Alibaba Group Holding Ltd.
"About a $100 million plus is what we need, until we start being independent," Vikal told Reuters in an interview late on Monday.
Vikal said some of Snapdeal's existing investors including SoftBank, its largest backer, were willing to participate in the fundraising.
SoftBank declined to comment on the matter.
India's burgeoning online retail sector is led by home-grown player Flipkart.
Industry sources say that Snapdeal's loss of the No. 2 spot and its lack of profitability mean it will have to raise money at a much lower valuation than the $6.5 billion valuation it enjoyed a year ago after a fund raising led by Canada's Ontario Teachers' Pension Plan.
Snapdeal last raised slightly over $200 million via two separate funding rounds in 2016.
The company's logistics unit Vulcan Express and e-commerce solutions provider Unicommerce will break even in the quarter to June, giving a fillip to its profitability plan, Vikal said.
Snapdeal has cut costs by using automated systems to reduce labor costs, renegotiated vendor contracts and it plans to let go of excess floor space at its headquarters outside New Delhi, Vikal said.
In February, the firm also laid off 600 employees and its founders Kunal Bahl and Rohit Bansal stopped drawing salaries.
The measures and a steep reduction in fulfillment costs have helped the company reduce losses sharply, said Vikal.
Vikal declined to comment on whether Snapdeal could be an acquisition target. Alibaba, according to a source, is in early talks with SoftBank about potentially merging Snapdeal with local rival Paytm.
Speaking about digital payments arm FreeCharge, which sources say Snapdeal is looking to sell, Vikal said the company evaluates any "inbound interest" and some international players had shown interest in becoming partners in the business.
(Reporting by Sankalp Phartiyal; Editing by Euan Rocha and Susan Fenton)