Published On: Mon, Apr 10th, 2017
Business | By IANS

Flipkart raises $1.4 bn, to take over eBay.in

Bangalore: India’s leading e-tailer Flipkart on Monday announced raising $1.4 billion (Rs.9,042 crore) from Microsoft, eBay and Chinese investment firm Tencent.

eBay also signed an exclusive cross-border trade pact with Flipkart

“The latest funding round, at a post-transaction valuation of $11.6 billion (Rs.74,885 crore), is the largest in our 10-year history and the Indian internet sector,” stated the city-based e-commerce major in a statement here.

The deal with eBay involves sale of eBay.in to Flipkart. eBay made a cash investment in Flipkart for an unspecified equity stake.

eBay.in will, however, continue to operate as an independent entity despite being a part of Flipkart.

Flipkart declined to give break-up or specific investment made by each of the trio — global software product firm (Microsoft), US-based e-commerce major (eBay) and Shenzen-based Tencent as private equity.

“The landmark deal endorses our tech prowess and innovative mindset and the potential we have to disrupt traditional markets,” said Flipkart co-founders Sachin Bansal and Binny Bansal in the joint statement.

The huge investment is seen as an affirmation of the home-grown technology ecosystem and its ability to address the people’s daily problems across the country.

Tech research firm Gartner said it was good news from Flipkart, as it solidified it as a market leader, at least in the short term. “Flipkart has been and will continue to make acquistions to increase scale, and the next challenge is to strategise the path to a sustainable business model within a set time frame,” said Sandy Shen Research Director at Gartner.

“The deal reaffirms our resolve to hasten the transformation of commerce in the country through technology,” asserted the co-founders for Flipkart.

With their investments, the trio joined a group of investors, including Tiger Global Management, Naspers, Accel Partners and DST Global.

In the 13 rounds of funding since January 2009, the company raised a huge $4.65 billion (Rs.30,038 crore at current value), including $700 million private equity from two investors in July 2015 and $700 million from 10 investors led by Steadview Capital in December 2014 when the company was valued at $11 billion.

eBay also signed an exclusive cross-border trade pact with Flipkart, which enables the latter’s customers access an array of global inventory on the former’s website.

“The pact will also give eBay customers access to Indian inventory from Flipkarta’s sellers on the latter’s platform,” noted the statement.

“The combination of our position as a global e-commerce player and Flipkart’s market stature will allow us to maximize the opportunity for both companies in India,” said eBay’s Chief Executive Officer Devin Wenig in the statement.

As a leading provider of internet value-added services in China and a strategic investor, Tencent brings its experience in linking social networking and e-commerce.

“Our strategic partnership enables us to participate in the opportunities in e-commerce and payments in India. We look forward to helping Flipkart deliver experiences to users and contribute to the development of the internet ecosystem in India,” said Tencent President Martin Lau in the statement.

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