- Kristopher Fraser |
The speculation that India's e-commerce giant Flipkart is looking at a potential takeover of smaller competitor Snapdeal is stronger than ever amidst the news that the former has raised 1.4 billion dollars from eBay Inc.,Tencent Holdings Ltd. and Microsoft Corp. in their biggest round of funding ever.
As of the latest funding round, Flipkart now has a total valuation of 11.6 billion dollars.
eBay invested a 500 million dollars in Flipkart for a stake. As a result, the two companies will merge their operations in India and Flipkart will own and operate eBay's business there once the deal closes.
This new found capital enables Flipkart to take on its biggest rival, Amazon.
“This is a landmark deal for Flipkart and for India as it endorses our tech prowess, our innovative mindset and the potential we have to disrupt traditional markets. It is a resounding acknowledgement that the home-grown tech ecosystem is indeed thriving and succeeding in solving genuine problems in people’s daily lives across all of India,” Flipkart co-founders Sachin Bansal and Binny Bansal said in a statement.
“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. It is interesting to note that this round sees the investment from strategic investors that will bring technology and market expertise that Flipkart earnestly needs, in contrast to the previous round of mostly financial investors,” said Sandy Shen, research director at Gartner, to Livemint.