India’s largest online retailer
Flipkart has closed a mammoth funding round of $1.4 Billion from Tencent
Holding Ltd, eBay Inc., and Microsoft Corp., in the biggest ever start-up funding
round that both boosts Flipkart ability to compete with arch-rival Amazon India
and takes the company a step closer to presenting itself as the only option to
the US firm’s Indian arm.
Flipkart Ltd will also buy eBay’s
India business as part of the $1.4 Billion deal. The funding round values
Flipkart at $11.6 Billion, which is lower than its peak valuation of $15
billion but still higher than the valuation it was assigned by some of its own
investors last year. Flipkart may get additional capital soon as it is
in talks to buy smaller rival Snapdeal (Jasper Infotech Pvt. Ltd).
The deal valued eBay’s India unit
at $200-$250 million. eBay India will continue to operate its platform as a
unit of Flipkart; it becomes the latest acquisition for Flipkart, which has
bought the fashion retailers Myntra and Jabong as well as mobile payments app
PhonePe in the past three years. The Bengaluru-based online retailer
fetched a pre-money valuation of $10.2 billion in the latest round. Pre-money
refers to the value of the company excluding the round’s capital infusion.
Before this round, Flipkart had last raised
funds in June 2015 when existing investors led by Tiger Global Management
pumped $700 million into the company, valuing it at $15 billion. Since
starting out in 2007, Flipkart has raised nearly $5 billion in capital,
accounting for more than 45% of funds raised by all 10 Indian unicorns, which
include Snapdeal, Paytm, Ola and Quikr. Amazon has committed $5 billion toward
its Indian operations, of which it has already spent more than $2 billion.
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