FlipKart Bounced Back in Online Business Gets 1.4 Billion Funding
As a part of the funding, global e-commerce leader eBay will invest $500 million cash in Flipkart for an equity stake and sell eBay India to the Indian company. eBay India boasts 70,000 merchants and 4 million buyers.
NEW DELHI: India’s leading e-commerce marketplace Flipkart has finally managed to bounce back by raising $1.4 billion from three global blue-chip tech companies Tencent, eBay and Microsoft, at a post-transaction valuation of $11.6 billion.
The impending merger of Snapdeal’s holding firm Jasper Infotech with Flipkart is also expected to close in the next two weeks. This deal will see Softbank, which owns over 30 per cent of Snapdeal, investing up to $1.5 billion into the merged entity by buying out one-third of Tiger Global’s stake in Flipkart. Together, these deals will create a clear duopoly in the Indian e-commerce arena as Flipkart is now fully equipped to take on the mighty Amazon. Alibaba, the other global e-commerce giant, is expected to enter India later this year.
Calling it a landmark deal, Flipkart founders Sachin Bansal and Binny Bansal, in a statement, said, “The deal endorses our tech prowess, innovative mindset and the potential we have to disrupt traditional markets and is a resounding acknowledgement that the home-grown tech ecosystem is thriving, succeeding in solving genuine problems in people’s lives across India.” Avnish Bajaj, MD, Matrix Partners India said: “This is excellent for the ecosystem as the doom and gloom surrounding all things Indian last year is starting to lift and sanity is prevailing”.
“Capital alone is not a differentiator – Flipkart has upped its focus on execution in the last year and would need to continue to out-execute and out-innovate Amazon to hold their own in the market,” he said.
Anil Kumar, CEO at RedSeer Consulting, agrees. “This is not just a win for Flipkart but speaks for the huge untapped potential of the e-commerce industry which analysts and investors had written off last year.”
He added that Flipkart, which was sidelined by Amazon pre-Diwali, will now be fortified to launch new categories, create more market share with exclusive brand partnerships and strengthen its reach in the North and North Eastern markets.