- Flipkart has raised 1.4 billion from three leading tech giants.
- The company is said to be valued at $11.6 billion.
That’s not all! The e-commerce firm has acquired eBay India, which comes as a part of the deal. It’s dubbed as a strategic commercial agreement. And, there is no denying that the Flipkart Group brings benefits galore for customers and sellers on both Flipkart and eBay.
“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,” Sachin Bansal and Binny Bansal, Founders of Flipkart, said on April 10, 2017.
Post the funding, the company is being valued at $11.6 billion, which may be lower than its highest valuation so far, but for a company with multiple markdowns in nine months, it’s a good comeback. With the funding and acquisition, the company can garner support to combat its biggest competitor - Amazon.
Sandy Shen, Research Director, Gartner, says the deal brings technology and market expertise that Flipkart earnestly needs, in contrast to the previous round of mostly financial investors.
“Although India’s e-commerce market is still at an early stage, the market is seeing signs of consolidation as scale is a key success factor in the business. Flipkart has been and will continue to make acquisitions to increase scale, and the next challenge is to strategize the path to a sustainable business model within a set time frame. Hopefully with the funding and expertise it is getting from the investors, it will be able to establish itself as a true market leader from both the technology and operational perspectives,” Shen added.
“The combination of eBay’s position as a leading global e-commerce 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.
The eBay India becoming a part of the Flipkart Group is touted as a strategic commercial agreement. And, in exchange of equity, eBay will be paying majority of cash. According to Economic Times, eBay will continue to operate as a separate entity.
Furthermore, Flipkart and eBay have inked an exclusive cross-border trade agreement, which will give former's customers access to latter's global inventory. On the other hand, Flipkart sellers will get an opportunity to expand their sales across the globe.
Last Updated 31, Mar 2018, 6:35 PM IST