India apos;s Flipkart Raises 1.4 Bn From Microsoft EBay Tencent
A record funding round worth $1.4 billion has shored up India's top e-commerce company Flipkart in its fight against online retail giant Amazon.
Chinese social media and entertainment firm Tencent Holdings Ltd, the world's biggest software company Microsoft Corp and online marketplace eBay Inc participated in the funding round, Flipkart said in a statement on Monday.
The investment has been described as the largest in the history of India's internet sector and now puts Flipkart at a value of $11.6 billion, the company said.
Sachin Bansal, co-founder and Executive Chairman, Flipkart speaks during a press conference on 'Model GST Law (TCS) for the e Commerce Sector' in New Delhi on February 9, 2017
That is lower than the $15 billion valuation achieved at its last fundraising in 2015, reflecting how competition has intensified in the e-commerce sector as companies vie for a slice of the world's fastest-growing internet services market.
'We are delighted that Tencent, eBay and Microsoft - all innovation powerhouses - have chosen to partner with us on their India journey,' Flipkart founders Sachin Bansal and Binny Bansal, who are not related, said in a statement.
'This deal reaffirms our resolve to hasten the transformation of commerce in India through technology.'
The company was founded in 2007 by former Amazon employees Sachin Bansal (right) and Binny Bansal (left)
As part of the deal Flipkart will acquire and run eBay India in return for a $500 million investment from the US firm.
A Flipkart spokeswoman said eBay.in will continue to operate as a 'separate business' within the Flipkart group, which includes fashion portals Myntra and Jabong.
ebay, one of the pioneers of online commerce in India, runs a marketplace selling everything from bed sheets to smartphones but with little marketing and few exclusive launches on its India portal sales have lagged behind Flipkart and Amazon.
President of eBay Devin Wenig said the merger of its local operations with the Bangalore-based firm would 'take it to greater heights' in India, a multi-billion online retail market.
The deal has been described as the largest ever in the sector and https://aiswiki.wustl.edu/oisshelp/index.php/India_apos;s_Flipkart_May_Appoint_New_Group_CEO_In_Place_Of_Binny_Bansal... takes Flipkart to a value of $11.6 billion
Flipkart, founded in 2007 by the two former Amazon employees, and its smaller local rival Snapdeal have attracted billions of dollars in overseas investment since their inception.
It has earlier drawn backers such as New-York based venture capitalists Tiger Global Management LLC and Singapore sovereign wealth fund GIC.
In 2014 Flipkart raised $1 billion in funding while Snapdeal received $627 million from Japan's Softbank.
Research firm Gartner called Flipkart's latest fundraising a positive step.
'This is good news for Flipkart as it solidifies it as a market leader at least in the short term, keeping competition - especially Amazon - at bay,' said Sandy Shen, research director at Gartner.
As part of the deal, Flipkart will acquire and run eBay India in return for a $500 million investment
'Flipkart has been and will continue to make acquisitions to increase scale, and the next challenge is to strategise the path to a sustainable business model within a set timeframe.'
Both Flipkart and Snapdeal have battled stiff competition from American e-commerce giant Amazon since it entered India's cut-throat and rapidly growing online retail market in 2013.
Amazon last year said it would invest over $5 billion in India, and has recently expanded into online video and grocery shopping, seeking to expand aggressively in a country where a rising middle class is increasingly shopping online.
RELATED ARTICLES [# Previous] [# 1] [# Next] [/indiahome/indianews/article-4243248/American-retailers-slammed-using-sacred-Hindi-symbols.html 'It's a deliberate and malicious act to hurt the Hindu...] [/indiahome/indianews/article-3935766/Digital-money-KING-Small-vendors-India-unzip-e-wallets-demonitisation-sweeps-away-86-cent-currency-circulation.html Digital money is KING! Small vendors across India unzip...] Share this article Share The fundraising also comes amid speculation Flipkart may be interested in a takeover of smaller rival Snapdeal, which would give the former added heft to compete against Amazon.
A distant third player, Snapdeal has declined to comment on sale talks and said that it remains focused on achieving profitability, but recent layoffs have heightened speculation about a takeover.
India's e-commerce market was worth about $23 billion in 2015, according to business body Assocham, and is expected to be worth over $32 billion by the end of the decade.
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