India’s largest and most successful e-commerce platform Flipkart has finally put all the rumors to rest on Monday by confirming a successful fund raise of USD 1.4 billion at a post-transaction valuation of $11.6 billion, a notable drop of 3.6 billion from its May 2015 valuation. Although, not completely in Flipkart’s favor, the move surely strengthens their arsenal with big names like strategic investor Tencent, ebay and Microsoft. With Alibaba’s speculated entry in India by the end of this year, Flipkart has already started preparations for a battle among giants; Amazon, Alibaba and Flipkart.
Tencent, a Chinese Investing firm and owner of wechat, has already invested in Indian messaging platform Hike and healthcare startup Practo. But, this deal of $700 million is their largest investment in India. India being the fastest growing internet market, with studies estimating online population in India to reach 450-465 million by June 2017, involvement of huge firms does align with the opportunity. Tencent joins as a strategic investor, bringing experience in linking social networking with e-commerce.
“This strategic partnership enables Tencent to participate in the exciting opportunities in e-commerce and payments in India. We look forward to helping Flipkart to deliver compelling experiences to users throughout India, and to contribute to the development of the internet ecosystem there,” said Martin Lau, Tencent President.
The eBay deal comes with a $500 million cash investment along with eBay taking $200 million in stocks for handing over its Indian platform ebay.in to Flipkart. But, eBay will continue to function as an independent entity separate from Flipkart. There is also a cross-border agreement between two companies to promote each other’s operations. As a result, eBay users will be able to access inventories from Flipkart sellers and vice-versa, providing a wider global presence to both the firms.
“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,” Flipkart founders Sachin Bansal and Binny Bansal said in a statement.
On its way towards monopoly, Flipkart has already acquired firms like Myntra, Jabong and now ebay India. All of this to stand strong against Amazon. A news about Snapdeal’s acquisition by Flipkart following its struggle to generate profits is also doing rounds.
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