Reacting sharply to an Economic Times report about a possible merger deal with amazon, Flipkart has responded with a rather sharp statement.

In an e-mailed response sent to us, Flipkart spokesperson says,

The report is pure fiction and seems to have been constructed based on invisible “sources” that have highly imaginative minds and given to improbable flights of fancy. There have been no talks or discussions for potential sale. Flipkart continues to be the market leader in India and we are in this business for the long haul.

While the reaction isn’t actually surprising, we are still looking into the worthiness of this story on our own, and will keep updating you with the same once we have something substantial. Stay Tuned.


In what could be the most ground-breaking, earth-shattering story for India’s massive e-commerce market, poster boy Flipkart had reportedly considered selling its business to its biggest rival, the U.S. behemoth Amazon, reports Economic Times. If the deal happens, this could be the biggest consolidation move in India’s startup space.

While we have mailed both Amazon India and Flipkart for statements, top investors sources have “voiced” that a potential deal between two of India’s biggest E-commerce players was on the cards. ET Sources have however further commented, that there is — at the moment — absolutely no reason to believe that a similar negotiation is ongoing right now or that the deal will be struck at all.

As for the valuations offered, Amazon was willing to spend close to $8 Billion to buy out Flipkart — which of course was rejected by Flipkart, which was — at the time this offer was made — riding high on a $15 Billion plus valuation. We’ve mailed both the companies to comment on this specific issue, and will update this story if (which is a big if) we do get a response on this.

However, Flipkart itself denied that it is up for sale, or that it is in the market for capital to Economic Times. Binny Bansal, the chief executive officer of the Bengaluru-based company, said in a statement that Flipkart would raise money only at the right valuation.

This report though, if true in the tiniest of senses, will come nothing short of a shock to those of us who had pinned hopes on Indian unicorns to go the distance and stand out as separate internet giants instead of being one-time entrepreneurial ventures, looking to get acquired. Flipkart — despite all talks of a possible bubble — continues to remain the blue-eyed boy, which even globally people are eyeing for to become Indian history’s biggest internet success story.

The talks were reportedly held in the last quarter of 2015.

At this time, we cannot confirm how true the report is. More so because of the fact, that earlier, Flipkart had announced its plans for an Initial Public Offering (IPO). About six months ago, Flipkart bought back its logistics arm from WS Retail to simplify company structure ahead of its IPO which followed from a major senior management shake-up — both moves looking towards improving the current company structure for a possible IPO.

Flipkart is now looking to spin off its logistics business as an independent unit catering to merchants for both online and offline sales.

On the down side though, the company isn’t able to maintain its timeline for the IPO. And those chances received a major dent when Morgan Stanley recently marked down the company’s valuation by 27 percent — bringing it down from a sky-rocketed $15 Billion to a more realistic $11 Billion.

As for fresh capital flow into Flipkart, the company secured around Rs. 450 crore in credit from HDFC Bank last week, while some reports suggest that the company is still on the look-out to raise around $1 billion in a down round. Those reports are corroborated by similar reports, which talk about Flipkart potential fundraise from Alibaba. Alibaba is also an investor in Snapdeal and PayTM. The company’s deal with Alibaba could also form an alliance with Paytm, or a possibility of sale of Paytm’s e-commerce business to Flipkart.

Its A Tough Battle For Flipkart

Amazon has some serious access to cash and Jeff Bezos has already promised $2 billion for its India operations. In terms of traffic, Amazon already trumps all other Indian e-commerce players. Moreover, the company is in no mood to shy away from investing more into its India business, largely because of the fact that this market will be worth over $70 Billion by 2020.

According to this merger report, Flipkart-Amazon talks went cold after the offer was perceived to be too low, but the sources claim that the situation can change in favour of Flipkart, given Alibaba’s interest in the company. The unknown top-level executive said:

If Alibaba takes a stake in Flipkart, and decides to merge all three companies (Flipkart, Paytm and Snapdeal) that may put Amazon in a tough spot.

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