Finally, putting an end to the continuous stream of rumors and speculations, Flipkart has today confirmed everybody’s suspicions. It has now been announced that the homegrown e-commerce giant has finally added a whopping $1.4 billion to its depleting coffers. It has managed to secure this investment at a post-money valuation of $11.6 billion from the likes of Tencent, eBay, and Microsoft.
This fundraising round also witnessed participation from existing Flipkart backers – Tiger Global Management, Naspers Group, Accel Partners and DST Global. This is the biggest investment round for the e-commerce giant till date, which has picked up after about two years since its last funding round in July 2015. Flipkart has now raised a total of $4.65 billion over the last nine years since it has been operational.
Commenting on the investment, Flipkart’s co-founders Sachin and Binny Bansal said,
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.
The homegrown e-commerce has raised this funding round at a valuation quite lower than its peak valuation of $15 billion during its previous round. But, this valuation is fairly decent for a company which had been plagued with numerous valuation markdowns by a cohort of investment firms. It also debuted several management changes, the biggest and most recent one being the appointment of Tiger Global exec Kalyan Krishnamurthy as the CEO.
However, there’s another silver lining to this fundraising round. Global e-commerce giant eBay has not only pumped capital (that too in cash for a minority stake) in India’s leading e-tailer Flipkart but it is also “accompanied by a strategic commercial agreement.” It means Flipkart is taking over an operation which should’ve been bigger than itself due to the name attached to it.
Yes, a massively surprising speculation has been confirmed with today’s announcement as Flipkart is taking control over eBay’s India operations but the e-commerce website (eBay.in) will continue to operate independently. Also, the two e-commerce behemoths have signed an exclusive cross-border trade agreement to make each others’ inventories available to international customers.Big torrent sites are slowly fading but you can find list of best Torrent sites on Devs-Lab which are working Torrent.
Now, Indian masses will be able to gain access to a variety of global inventory on eBay, while foreigners will have access to Flipkart’s Indian inventory. This is a significant opportunity for sellers to make their mark in the global market. Speaking on their partnership, Devin Wenig, President and CEO of eBay Inc said:
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.
The confidence from global tech giants shows the company has now matured and now got some biggies on its side to support it in the fight against the advent rise of international players such as Amazon and Alibaba (who is also pushing massive investments into digital payments major Paytm). Flipkart is looking to introduce new products and offerings, including the addition of artificial intelligence to their platform to further the customer shopping experience. With the help of IT companies like Mustard IT, this process is taking place even faster.
The addition of Microsoft to its cohort of investors is not much surprising as the hints were already available at our disposal. Both the companies had recently signed an agreement to adopt Azure as latter’s exclusive public cloud platform and it was announced by CEO Satya Nadella himself. This defines the significance of the deal, which has now grown into a partnership. And that’s probably just the beginning of another journey for Flipkart.
In the official blog post, the co-founders continue to add,
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 homegrown tech ecosystem is indeed thriving and succeeding in solving genuine problems in people’s daily lives across all of India.
And that’s probably just the beginning of another journey for Flipkart. The e-commerce giant is further expected to get an additional capital infusion from one of the biggest investors in the country — SoftBank. The Japanese telecom company is aggressively gunning for the sale of rival homegrown e-commerce giant Snapdeal to Flipkart for as low as $950 million. It has already initiated the process for the sale — where the co-founders have no say — and is looking to buy out not only the co-founders, as well as the early investors i.e Kalaari Capital and Nexus Venture Partners. It currently owns a stake of over 33 percent in Snapdeal parent Jasper Infotech.