Kunal Bahl, co-founder of Snapdeal, wants to give another shot by initiating Snapdeal 2.0 process, after declining the merger offer of $900-950 million from Flipkart. Bahl was always hesitant against the forced merger with rival Flipkart. Now after a complete research of rivals business models, he believes that the open market model will be good for Snapdeals growth.
An early investor in Snapdeal, holding almost 12.20% stake in it comes out in support of the Snapdeal 2.0 decision. Nexus Venture Partners also has a seat on Snapdeals board that has representation from SoftBank, Kalaari Capital and the two founders Kunal Bahl and Rohit Bansal. After the announcement, Vani Kola, co-founder of Kalaari Capital criticised the move of not accepting the merger offer and initiating again on its own.
It is possible that the company will cut its workforce to half from the current 1,200 employees over the period of time. As the company is initiating on its own so it is necessary to cut costs as much as possible.
According to company sources, Snapdeal may trim its workforce by half from the current 1,200 employees over the next few months as it pursues an "independent" path post calling off a merger with bigger rival Flipkart.
SoftBank, the largest shareholder in Snapdeal and the one driving the merger discussions with Flipkart, has said it respected the decision to pursue an independent strategy. However, over the last few quarters, the SoftBank-funded company has seen its fortunes failing along with intense competition from US-based Amazon and homegrown player Flipkart.