A couple of high-profile investors are planning to finally grant Flipkart’s one wish, which it has been making since the last year — fresh funding. As per reports, Flipkart is in talks to raise a new funding round of close to $1.5 billion. eBay and China-based Tencent are said to lead the funding round.
Reports indicate that eBay is likely to invest about $400-500 million while discussions with Chinese internet conglomerate Tencent and the likelihood of a potential third investor joining the round are still underway. If the discussions turn out to be successful, it will enable Flipkart to forge an alliance with deep-pocketed strategic investors, who also compete with its two primary rivals — Jeff Bezos’ Amazon and Jack Ma’s Alibaba.
The company has been struggling to raise a new funding round for quite some time. With the new financial boost, it will be looking forward to securing its position as the leader in one of the world’s fastest growing markets for e-commerce. The homegrown giant is also exploring further funding from a third investor, said sources aware of the matter.
As per a person aware of the development, talks with eBay are at an advanced stage and a strategic deal may include Flipkart acquiring or merging their India operations. We have contacted both Flipkart and eBay for further clarification.
Earlier, Flipkart was said to be in talks with Microsoft, PayPal and others to add fresh $1.5 billion to its coffers. It was also reported to be in talks with Google Capital for the funding round. The fund raising was speculated to be at a valuation of $10-12 billion.
While the company seems to finally able to raise a funding round, the deal could see the Bengaluru-based company valued between $10 billion and $12 billion, indicating a down round. During it previous funding round in 2015, Flipkart was valued at $15.2 billion. However, the company has since gone through a series of valuation markdowns, trashing its valuation from over $15 billion to less than $5.5 billion. All thanks to Morgan Stanley.
This is very crucial time for the e-commerce company, and getting new funding will give it some much-needed boost. It seeks to ward off the threat from Amazon India, which received an infusion of Rs 7,000 crore in 2016 from its parent company. The American e-commerce giant also increased its commitment to its Indian operations from $2 billion to $5 billion in June 2016. As if that was not enough, Alibaba, the Chinese e-commerce giant has also made its way to the Indian market.
The Indian online retail industry is estimated to be worth about $15-16 billion and is one of the most competitive markets worldwide. Leading e-commerce companies from China and America are vying to outpace Flipkart, which has raised more than $3 billion to date to maintain its pole position in the market.
