Putting an end to a month-long speculation about an imminent investment round, India’s leading e-commerce marketplace Flipkart officially announced today that it has secured US$1.4 billion in fresh funding led by Tencent Holdings. eBay and Microsoft have also joined the latest round, which values the Bangalore-based company at US$11.6 billion.
“This is a landmark deal for Flipkart and for India as it endorses our tech prowess, our innovative mindset and the potential we have to disrupt traditional markets. It is a resounding acknowledgement that the homegrown tech ecosystem is indeed thriving and succeeding in solving genuine problems in people’s daily lives across all of India,” Flipkart founders Sachin Bansal and Binny Bansal said in a joint statement.
As part of the deal, Flipkart has also acquired eBay’s India operations in exchange for equity stake. Post the deal, eBay.in will continue to operate as an independent entity as a part of Flipkart.
In addition, the duo have also signed an exclusive cross-border trade agreement, under which customers of Flipkart will gain access to the wide array of global inventory on eBay, while eBay’s customers will have access to more unique Indian inventory provided by Flipkart sellers. Thus, sellers on Flipkart will now have an opportunity to expand their sales globally.
“The combination of eBay’s position as a leading global e-commerce company and Flipkart’s market stature will allow us to accelerate and maximise the opportunity for both companies in India,” said Devin Wenig, President and CEO of eBay Inc.
Started in 2007, Flipkart has been locked in a bitter battle with Amazon to become the numero uno in India. The e-commerce giant, once considered as the poster boy of the Indian startup ecosystem, has been in a shambles for the past couple of years. Flipkart, one of the first home-grown tech companies from India to enter the coveted global Unicorn startups club, has lost out to close rival Amazon, which came to India five years after the former’s launch in 2007. Flipkart enjoyed an invincible run until the entry of Amazon in 2012, and it has since been losing ground. The US-based company acquired signifiant marketshare and tens of thousands of consumers through a systematic marketing strategy and by offering better user experience and services. Over the past 12 months, Flipkart’s sa its valuation being slashed by its minority investor Morgan Stanley several times.
In 2014, Flipkart had raised US$1 billion to become the first Indian company to raise such a huge amount, from investors including Tiger Global, Russia-based DST Global, and Accel Partners.
The company recently roped in Kalyan Krishnamurthy, Managing Director of Tiger Global Management, as its CEO. Under his leadership, the company has started showing signs of a turnaround.