E-commerce major Flipkart has raised $1.4 billion in its latest funding round - the biggest ever in its 10-year history. Tencent, eBay and Microsoft have made investments aggregating to $1.4 billion in Flipkart, the e-commerce major said a statement, at a post-transaction valuation of $11.6 billion. The investment by eBay is accompanied by a strategic commercial agreement with Flipkart. In exchange for an equity stake in Flipkart, eBay is making a cash investment in and selling its eBay.in business to Flipkart. eBay.in will continue to operate as an independent entity as a part of Flipkart.
"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. This deal reaffirms our resolve to hasten the transformation of commerce in India through technology," Sachin Bansal and Binny Bansal, founders of Flipkart, said in a statement.
Commenting on the Flipkart-eBay deal, Devin Wenig, president and CEO of eBay Inc, said: "The combination of eBay's position as a leading global e-commerce company and Flipkart's market stature will allow us to accelerate and maximize the opportunity for both companies in India."
The fresh funding round has given rise to speculation that Japan's SoftBank Group is closing in on an agreement to combine e-commerce company Snapdeal with market Flipkart. SoftBank's Masayoshi Son owns about a third of Snapdeal parent Jasper Infotech. Snapdeal has for weeks been at the centre of much takeover speculation, with its largest backer Japan's Softbank seen as keen to sell the company to its larger rival, Tiger Global-backed Flipkart.
In an email over the weekend, Snapdeal's founders Kunal Bahl and Rohit Bansal said their priority was to ensure the well-being of employees amid the "speculation" surrounding the company. "We will do all that we can, and more, in working with our investors to ensure there is no disruption in employment and that there are positive professional as well as financial outcomes for the team as the way forward becomes clear," the duo said in the letter.
Flipkart founders Sachin Bansal and Binny Bansal hailed the funding round and the eBay India acquisition as a “landmark deal for Flipkart and for India” Sachin Bansal and Binny Bansal met as engineering students during their final-year summer project at Indian Institute of Technology – Delhi. In 2007, after moving to Bangalore, the duo started Flipkart on a modest budget and within a few years led its explosive growth to make Flipkart India’s leading e-commerce marketplace. In its 10-year odyssey, the Flipkart Group has grown to encompass Myntra and Jabong.