Indan online marketplace, Flipkart, has raised $1.4 billion from Tencent, eBay and Microsoft at a post-transaction valuation of $11.6 billion, being called its largest investment in a decade of the ecommerce venture’s existence. Adding to that, the investment by multinational ecommerce corporation, eBay, is accompanied by a strategic commercial agreement with Flipkart. In exchange for an equity stake in Flipkart, eBay is making cash investment in and selling its eBay India business to Flipkart. Post acquisition, eBay.in will continue to operate as an independent entity but as a part of Flipkart in the country.
“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.
Last month, various media reports speculated that that Flipkart is planning to merge assets with eBay India, a part of the company’s overall plans to raise $2 billion from a series of investors including investments from eBay. Though launched in 2004, eBay’s India business came into direct competition with Amazon, Flipkart, Paytm, Snapdeal and Shopclues and was number six amongst its peers. The merger with Flipkart will bring eBay into a level playing field with its competitors.
“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,” said Devin Wenig, President and CEO, eBay.
According to the deal, both companies have signed an exclusive cross-border trade agreement, as a result of which customers of Flipkart will gain access to the wide array of global inventory on eBay, while eBay’s customers will have access to unique Indian inventory provided by Flipkart sellers. Thus, sellers on Flipkart will now have an opportunity to expand their sales globally.