Published On: Mon, Apr 10th, 2017

Flipkart raises $1.4 billion from eBay, Microsoft and Tencent during an $11.6 billion valuation


Following months of rumors, Indian e-commerce hulk Flipkart has reliable that it has lifted $1.4 billion in new appropriation during a post-money gratefulness of $11.6 billion to conflict Amazon and Alibaba. The understanding includes some large name vital investors: China’s Tencent, eBay and Microsoft, which joint existent Flipkart backers that embody Tiger Global, Naspers, Accel and DST Global.

The investment will also see Flipkart take control of eBay India, a second-tier e-commerce actor in India, which will sojourn an eccentric e-commerce site. Separately eBay, that is a teenager financier in opposition Snapdeal, has inked an general understanding with eBay to cross-promote products between a services.

Flipkart has now lifted $4.65 billion from investors to date, according to Crunchbase. Its many new turn before to now was $700 million in Jul 2015, that valued a association during a most aloft $15 billion. While that’s a poignant down round, that many had been predicting, this investment is a singular largest turn of financing from an India tech startup.

But, regardless, times have altered during a company. Flipkart shuffled a care in Jan when former Tiger Global executive Kalyan Krishnamurthy became a CEO, and it has been tough to keep adult with a perfect volume of rumors entrance out given then.

Last month, Flipkart was reported to have lifted $1 billion from investors with skeleton for a serve billion to come later. It has also been related with a partnership understanding with opposition Snapdeal, a move media explain is encouraged by Snapdeal financier Softbank, in a bid to accelerate a rival corner opposite Amazon, while giving Snapdeal a springboard to rebound behind from a array of struggles that have enclosed 500-plus layoffs in February.

While a standing and odds of other deals is unclear, today’s proclamation gives Flipkart a array of really vital allies to conflict Amazon and Alibaba-backed Paytm, and “drive a subsequent proviso of e-commerce expansion in India,” to use a company’s possess words.

I recently wrote that India’s e-commerce space has increasingly looked like being a conflict between Amazon, that has invested over $5 billion in a internal operations, and Alibaba, that has done a array of investments in Paytm’s commerce, payments and nascent banking businesses, and now Flipkart has the war chest and supporters to get itself resolutely behind into a battle.

At interest is one of a world’s fastest flourishing internet markets. India’s online race is sloping to strech 450 million-465 million people by Jun 2017, according to a new news co-authored by the Internet and Mobile Association of India, widening a assembly of intensity e-commerce customers. While China and a U.S. now browbeat in terms of e-commerce spending, a value of online sales in India is predicted to strech $48 billion by 2020, researcher organisation Forrester claimed.

“This is a landmark understanding for Flipkart and for India as it endorses a tech prowess, a innovative mindset and a intensity we have to interrupt normal markets. It is a resounding confirmation that a homegrown tech ecosystem is indeed abounding and next in elucidate genuine problems in people’s daily lives opposite all of India,” Flipkart founders Sachin Bansal and Binny Bansal pronounced in a statement.

On a financier side, a few equipment are noteworthy.

eBay was an early financier in Snapdeal, though sole off partial of a interest behind in 2015. Now it finds itself on another team’s bench, nonetheless that could of change if a much-speculated Flipkart-Snapdeal partnership understanding is completed.

This investment is Microsoft’s largest understanding in India, and it comes only months after Flipkart switched a infrastructure to a U.S. company’s Azure cloud computing platform. Satya Nadella, Microsoft’s CEO, visited India around a time of a understanding in February, so you’d suppose there were also talks around this investment.

Finally, a understanding is also a largest investment in India for Tencent, too. Tencent has prolonged been a inclusive investor, though this understanding completes 3 utterly particular outcomes for a investment deal. It recently corroborated Tesla, shopping adult a 5 percent interest for around $2.2 billion, while Snap’s new IPO gave it a initial equity in publicly listed U.S. company. Now it also has a vital interest in India’s e-commerce war.

Featured Image: Samrat Mazumdar/Flickr UNDER A CC BY-ND 2.0 LICENSE

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