Flipkart, India's biggest e-commerce company raises a $2 bn capital in its bid to acquire eBay India's operations. This move will give the company the much-needed boost for its fight with Amazon for market share. According to reports from FactorDaily eBay India, which comes in at sixth position in terms of market share.
While Flipkart leads the pack and is followed closely by Amazon, which is followed by Shopclues, Paytm and Snapdeal. This is the current scenario of India's $15 billion e-commerce market, with this acquisition eBay will get absorbed into Flipkart as part of the transaction. The latest fundraising which was led by Chinese Internet giant Tencent, and is putting in over $500 million, the fundraising is being backed by eBay and Microsoft.
Reported as on March 20th Flipkart has already closed its $1 billion funding from Microsoft, Tencent and eBay. FactorDaily's sources said the round will stay open until it reaches $2 billion in total.
While the round values Flipkart at around $10 billion, it is lower than the $15.1 billion valuations the company received in its last round. It is still higher than the $8 billion valuations that was expected in the round.
An executive, familiar with the development stated, "Even a $10 billion valuation means a lot and will go a long way in establishing India's image among the foreign LPs who have been skeptical about exits."
Flipkart has raised $4.1 billion in 13 funding rounds since January 2009, while it is engaged in a tough battle with rival Amazon over market share in India's booming e-commerce market. With Amazon closing in on Flipkart the company's reigns have been passed from one CEO to the other.
With founders Sachin and Binny Bansal, exiting from running core operations, the reigns are now being handed over to Kalyan Krishnamurthy. Krishnamurthy who is a former trusted lieutenant of the company's biggest investor Tiger Global will now dawn the role of CEO.