The new fiscal year starting from April is proving to be a crucial year for Indian e-commerce industry. The first shot of fireworks has just been ignited, as Flipkart, India’s largest e-commerce portal, has announced a major news.
The biggest news is that Flipkart has raised $1.4 billion from three major investors: Tencent, Microsoft and Ebay; and this is Flipkart’s largest ever fundraising in their last 10 years of existence.
And the most significant news is that Flipkart has acquired Ebay India, thereby cementing their position strongly, and directly challenging Amazon’s ambitions in India.
In their blog post, Flipkart said, “The biggest investment in Flipkart’s 10-year history comes at an opportune moment for e-commerce in India. Tencent, eBay and Microsoft have made investments aggregating to $1.4 billion in Flipkart, India’s leading online marketplace.”
This investment has been made at a valuation of $11.6 billion, which has been reduced from $15.2 billion, during their last investment in 2015.
While this may sound confusing, but Ebay has invested a significant amount of VC funds into Flipkart, and at the same time sold off Ebay India. And in the bargain, they have acquired a small stake in Flipkart as well.
The blog post stated: “In exchange for an equity stake in Flipkart, eBay is making a cash investment in and selling it’s eBay.in business to Flipkart. eBay.in will continue to operate as an independent entity as a part of Flipkart.”
Besides, eBay and Flipkart has also signed a cross-border treaty, according to which Flipkart customers can now get easy access to international listings made on Ebay, while eBay users from the US can now seamlessly purchase products from India.
After acquiring Myntra, Jabong, PhonePe, Ebay India is seen as a major acquisition for Flipkart.
Why Is This A Significant Twist In Indian Ecommerce Story?
Mainly, there are two reasons:
- a) Ebay is afierce competitorof Amazon in India. By collaborating with Ebay, and actually acquiring Ebay India, Flipkart has made a smart move. They are grouping all Amazon’s competitors to form a solid defence in India. Last year, talks were on about a possible Walmart investment into Flipkart, and Walmart is another big competitor of Amazon in the US.
- b) Tencent is considered as Alibaba’s biggest competitor in China. Last week, Tencent reported$21.2 billion revenue, which exceeded all market analysis and expectations. Last year,Tencent overtook Alibaba to become China’s most valuable tech company.
And with Alibaba’s ambitious plan to capture Indian market, riding on Paytm’s popularity and exposure, Flipkart has made a big move to shake hands with Tencent.
While Ebay, Microsoft and Walmart can help Flipkart to stop Amazon’s growth, Tencent can prove to be a good ally to defeat Alibaba and Paytm’s incredible expansion in India.
Funds Raised By Flipkart Till Date – USD 4551 Million
|First Round||Accel India||2009||USD 1 Million|
|Second Round||Tiger Global||2010||USD 10 Million|
|Third Round||Tiger Global||June 2011||USD 20 Million|
|Fourth Round||Naspers / ICONIQ Capital||August 2012||USD 150 Million|
|Fifth Round||Naspers, Accel Partners, Tiger Global, and ICONIQ Capital||July 2013||USD 200 Million|
|Sixth Round||Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina and Vulcan Capital, Tiger Global||Oct 2013||USD 160 Million|
|Seventh Round||DST Global||May 2014||USD 210 Million|
|Eighth Round||Tiger Global, DST Global, Accel Partners (plus other new investors)||July 2014||USD 1000 Million|
|Ninth Round||Steadview Capital, Baillie Gifford, Greenoaks Capital, T. Rowe Price Associates, Qatar Investment Authority, DST Global, GIC, ICONIQ Capital, Tiger Global.||December 2014||USD 700 Million|
|Tenth Round||Steadview Capital & Other existing investors||July 2015||USD 700 Million|
|Eleventh Round||Tencent, Microsoft and Ebay||April 2017||USD 1400 Million|
|Total||USD 4551 Million|