Domestic e-commerce major Snapdeal is reported to be in plans to raise nearly $500 million, with Chinese Alibaba Group and Foxconn Technology Group as the main investors.
The latest round of funding will value Snapdeal at around $5 billion, Bloomberg reported, citing sources close to the development.
The investment will see Alibaba and Foxconn pumping in about $200 million each in the New Delhi-based Snapdeal.
The company's existing investor SoftBank Group is also expected to take part in the new round of funding, according to a source. The funding could lead to a partnership between Snapdeal and China's leading online retailer Alibaba on technology and products.
Competition in the country's e-commerce sector is getting fierce with the entry of new players. Mobile payment services firm Paytm, which recently started foraying into e-commerce space, is fast expanding its operations to vie with Flipkart, Snapdeal and Amazon.
A report by comScore released in June showed that Amazon India has surpassed its peers ― Flipkart and Snapdeal ― and its performance is measured in terms of monthly unique visitors.
Amazon, which launched its India marketplace in June 2013, had witnessed 23.6 million unique visitors in May this year, surpassing Flikpart with a slight margin.
Earlier in June, The Wall Street Journal had reported that Alibaba and iPhone assembler Foxconn are in talks with Snapdeal to buy 10% stake valuing the company at $5 billion.
In November last year, Snapdeal received $627 million funding from Japan's SoftBank Group, taking its valuation to $2 billion. Apart from Softbank, eBay and BlackRock are the other major investors in Snapdeal.
A report by Goldman Sachs released in May had said that domestic e-commerce firms such as Flipkart and Snapdeal will require another $20 billion (₹1.27 lakh crore) to sustain their current growth momentum over the next five years.
