The e-commerce firm has raised funds from Microsoft, ebay, and Tencent Holdings. The deal will also see eBay India becoming a part of Flipkart.
In its bid to take on US tech giant Amazon and capture a larger share of the Indian online retail market, e-commerce company Flipkart announced it has raised $1.4 billion. This makes it the largest e-commerce deal so far.
The Bengaluru-based firm raised the funding from Microsoft Corp, Tencent Holdings Ltd, a Chinese social media and entertainment company, and eBay Inc. The deal will see Flipkart valued at $11.6 billion, which is lower that the company’s 2015 valuation which was $15 billion. As part of the deal, eBay invested $500 million for a stake in Flipkar, and the Indian unit of eBay Inc will become part of the Flipkart group.
“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 these bring to Flipkart,” said Flipkart’s founders Sachin Bansal and Binny Bansal in a statement.
This deal comes after Flipkart’s main rival, Amazon, annouced last year that it would invest $5 billion in India and is looking to aggressively expand in the country where online shopping is only on the rise.
“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 Gartne, in a Reuters report. “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.”
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