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Flipkart raises $1.4 billion from new investors, acquires eBay India

11/04/2017
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India’s largest e-commerce marketplace Flipkart on Monday has confirmed a total of $1.4 billion fundraise from new investors Tencent Holdings Ltd., eBay Inc. and Microsoft Corp. This is Flipkart’s largest fund raising so far and through this multifaceted deal, it will also acquire eBay’s India operations.

The fundraising, the largest in the Indian startup ecosystem, sets Flipkart’s valuation at $11.6 billion which expresses a notable drop from $15.2 billion valuation in May 2015 when it had last raised funds of $700 million.

“We are delighted that Tencent, eBay  and Microsoft — all innovation powerhouses — have chosen to partner with us on their India journey. We have chosen these partners based on their long histories of pioneering industries, and the unique expertise and insights each of them bring to Flipkart. This deal reaffirms our resolve to hasten the transformation of commerce in India through technology.” – said Sachin Bansal and Binny Bansal, Founders of Flipkart.

Tencent by now is an investor in Indian startups like Hike; messaging platform and Practo; healthcare startup and will send key proficiency to Flipkart to further its leadership position in the Indian e-commerce market.

eBay India acquisition & cross-border agreement with eBay

The Flipkart funding likewise incorporates a strategic commercial agreement with the global e-commerce player eBay as per which eBay has sold its India business eBay.in to India’s most valuable startup Flipkart in addition to a $500 million cash investment in exchange for an undisclosed equity stake.

eBay.in will keep on operating as an autonomous entity within Flipkart and the deal is expected to close later this year, the company said. The Bengaluru-based e-tailer has additionally signed a special cross-border trade agreement, as a result of which Flipkart’s customers will gain access to eBay’s global inventory while eBay’s customers will have access to inventory from Flipkart sellers.

“The combination of eBay’s position as a leading global eCommerce company and Flipkart’s market stature will allow us to accelerate and maximize the opportunity for both companies in India,” said Devin Wenig, President and CEO of eBay Inc. “eBay is committed to winning in India in partnership with Flipkart. Our exclusive global trade partnership will allow eBay and Flipkart to reach even more consumers around the world.

Snapdeal, the under pressure e-commerce firm’s minor stake is owned by eBay and the speculation floating around Snapdeal being in merger talks with Flipkart has been given a sudden raise. With the news, Flipkart may get extra capital soon by Japan’s SoftBank Group Corp, which is currently Snapdeal’s largest investor.

Interestingly, this partnership with eBay is expected to help Flipkart that is right now battling out with Amazon to retain its leadership in the Indian e-commerce sector while also bracing up for the entry of China’s Alibaba.

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