Homegrown ecommerce unicorn Flipkart has raised $1.4 Bn funding from Tencent, eBay and Microsoft. This round of funding adds the consortium of global blue chip tech companies to an existing group of marquee investors including Tiger Global Management, Naspers Group, Accel Partners, and DST Global.
As per a company statement, the latest investment was done at a post-transaction valuation of $11.6 Bn.
Sachin Bansal and Binny Bansal, founders of Flipkart said, “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.”
This is the largest funding round in the 10-year history of the ecommerce marketplace and marks the biggest investment till date in the Indian internet sector.
They further added, “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 them bring to Flipkart.”
With this investment, Tencent will join Flipkart as a strategic investor, bringing experience in linking social networking and ecommerce.
Martin Lau, Tencent President said, “Flipkart is a leader in ecommerce in India, with strong operational expertise and a deep understanding of user behaviour. This strategic partnership enables Tencent to participate in the exciting opportunities in ecommerce and payments in India.”
Ebay To Sell Ebay.in To Flipkart
With this investment, eBay has entered into a strategic commercial agreement with Flipkart. In exchange for an equity stake in Flipkart, eBay is making a cash investment in Flipkart. It is also selling its eBay.in business to Flipkart.
As per the terms of the agreement, eBay.in will continue to operate as an independent entity as a part of Flipkart. The two entities have also signed an exclusive cross-border trade agreement allowing customers of Flipkart access to the global inventory on eBay. Meanwhile, eBay’s customers will have access to the unique Indian inventory provided by Flipkart sellers. Hence, the sellers on Flipkart will get an opportunity to expand their sales globally.
Devin Wenig, President and CEO of eBay Inc said, “The combination of eBay’s position as a leading global ecommerce company and Flipkart’s market stature will allow us to accelerate and maximise the opportunity for both companies in India.”
The Journey So Far
Founded in October 2007 by Sachin Bansal and Binny Bansal, Flipkart offers over 80 Mn products across 80+ categories.
The past year saw Flipkart go through a major restructuring of their organisation structure. In January 2016, Sachin Bansal stepped down from his role as CEO and was replaced by Binny Bansal. The following January, Binny Bansal also stepped down and was replaced by Kalyan Krishnamurthy as the latest CEO. The company, which has now been in business for 10 years, saw over 18 markdowns in valuation since 2015.
The ecommerce marketplace is also reportedly in talks to acquire nemesis Snapdeal. Last week, it was reported that amidst piling losses, complaints, and revoked funding offers, Snapdeal’s biggest backer SoftBank has proposed the sale of the company to Flipkart. If the sale goes through it will be a pivotal consolidation in the ecommerce space, and equip Flipkart to counter arch nemesis Amazon on home ground.