Marking the biggest ever transaction in Indian eCommerce industry, Flipkart has raised ₹9000 Crores ($1.4 Billion) from Tencent, eBay and Microsoft. The latest fad raise adds some of the finest global tech companies to the list of investors for Flipkart. The home-grown eCommerce giant already has the likes of Tiger Global, Naspers, DST Global and Accel Partners. The latest round of fund raise values Flipkart at ₹75,000 Crores ($11.6 Billion).
Speaking about the development, founders of Flipkart, Sachin Bansal and Binny Bansal termed it a landmark deal for Flipkart and added that the latest fund raise shows the confidence tech giants of the world have in Flipkart. They also mentioned that the investors believe Flipkart has the potential to disrupt the traditional market.
The founders further showed their delight to partner with the tech giants and added that Flipkart is fortunate enough to help the biggies on their India journey. These companies have been proven pioneers in their respective areas of expertise and that will give a huge boost to Flipkart in the coming time. With this, Tencent will join Flipkart as a strategic investor and will bring expertise to link social networking with eCommerce, something which Flipkart is trying since a bit of time.
Matrin Lau, President Tencent added that Flipkart has been an industry leader in India and has a proven record of understanding the user behaviour and a strong operational expertise. India has a bright future in terms of digital payments and eCommerce and the latest deal between Tencent and Flipkart will enable the company to be a part of it.
Along with the fund raise, the deal also finalises the acquisition of eBay’s India business. eBay has got into a strategic investment with Flipkart and it has made a cash investment for equity in Flipkart. Along with that, Flipkart has taken over eBay’s India business. eBay India will continue to run as a separate entity, however, Flipkart will have the authority to control it.
As per the agreement between Flipkart and eBay, both the companies will get access to merchants and products of either portal. Which means, Flipkart users will be able to buy from the Global eBay store and at the same time, users from outside India will have access to Flipkart’s inventory. It will help the local Indian sellers go global.
Flipkart completes 10 years of its existence this year. Before this, the company has raised 10 rounds of investment, with highest being $1 Billion(₹6000 Crore) in July 2014. Since last couple of years, it has shown a bit of struggle to rise funds along with a number of cuts in the valuation. Last year in January, the top management at Flipkart underwent a major reshuffle when Sachin Bansal had stepped down as CEO and Binny Bansal had taken his place. Once again, in January 2017, Kalyan Krishnamurthy, who was on Flipkart’s board representing one of the investors, took over as the CEO.
Since last few days, there are rumours that Snapdeal is in talks with Flipkart to sell its business. There were reports last week that despite funding offers turned down, Softbank has proposed the sale to Flipkart and if that happens, we will get to see a direct face off between Amazon and Flipkart.