After struggling for 18 months, Flipkart has finally been able to raise $1.4 billion funding. India’s leading e-commerce marketplace has received the amount from three global blue-chip tech companies Tencent, eBay and Microsoft, at a post-transaction valuation of $11.6 billion.
This is the biggest-ever e-commerce start-up funding round in the country surpasses the earlier high set up in July 2014 by Flipkart itself when it had got $1 billion in funding. The funding round values Flipkart at $11.6 billion, which is less than its peak valuation of $15 billion, but still higher than the valuation it was given by some of its own investors last year. It, however, continues to retain the title of India’s most-valued internet company.
“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 these bring to Flipkart,” stated Flipkart co-founders Sachin Bansal and Binny Bansal on the company’s blog.
The money inflow would help Flipkart in taking it arch-rival Amazon India head-on and helping it present itself to investors and customers as the only option to the US firm’s Indian wing. Amazon had earlier committed to invest $5 billion in the country over the next few years. Its Founder and CEO Jeff Bezos had indicated that the company will do anything to win India. There are speculations that India would turn into a battleground between Chinese internet heavyweights and Amazon, which would result in local incumbent to be forced to take a backseat, unless steadily fed with capital.
Tencent’s investment in Flipkart comes soon after arch rival Alibaba increased its footprint in the Indian market with a $200 million investment in Paytm’s online retail arm. Reports suggest that Alibaba could increase its investment as it gears up to dominate India.
“We look forward to helping Flipkart deliver compelling experiences to users throughout India, and to contribute to the development of the internet ecosystem there,” stated Martin Lau, President, Tencent.
As part of the deal, Flipkart would also buy eBay’s India business, which boasts 70,000 merchants and 4 million buyers, giving eBay an equity stake in the company for $500 million. The analysts suggest that with current round of funding SoftBank’s Masayoshi Son, leading a merger of smaller rival Snapdeal with Flipkart, will now have to pay out more cash to acquire a significant shareholding in the merged entity.
You may also like to read our latest analysed news:
- Game of Thrones actor Peter Dinklage death hoax
- Fact Check: Was Trinidadian cricketer Denesh Ramdin arrest at New York Airport
- Were ISCON sanyasis, stopping distributing BHAGAVADGITA in West Bengal
- Prakash Raj post fake images on twitter against PM Modi
Note: If you like being among the first to know about latest news, trending hoaxes, fake news etc, consider giving us a like on facebook or follow us on twitter (@myayupp)