In its latest funding round, Flipkart Group has raised $1.4 billion from Tencent, eBay and Microsoft, the company announced today. The deal includes the acquisition by Flipkart of eBay India. FactorDaily had reported these developments ahead of the current announcement last month, based on several insider interviews.
The press release confirms this, and elaborates that “in exchange for an equity stake in Flipkart, eBay is making a cash investment in and selling its eBay.in business to Flipkart. eBay.in will continue to operate as an independent entity as a part of Flipkart. Flipkart and eBay have also signed an exclusive cross-border trade agreement.”
The three new participants join Tiger Global Management, Naspers Group, Accel Partners and DST Global as Flipkart’s primary investors.
As a result of the partnership between Flipkart and eBay, customers of Flipkart will gain access to global inventory on eBay, while sellers on Flipkart will now have an opportunity to expand their sales globally.
The latest funding round pegs Flipkart’s post-transaction valuation at $11.6 billion. It is the largest in Flipkart’s 10-year history, the company said in a press release.
The announcement comes even as the company gears up to sign a $950 million deal to acquire Snapdeal, India’s third largest e-commerce company.
As per our reporting, Flipkart is looking to close the round at $2 billion with additional funding from Softbank, Snapdeal’s main investor. Freecharge, a recharge and payments company that Snapdeal acquired for a reported $400 million in 2015, is likely to be sold as a separate entity. “The asking price is $100 million,” said a source.
However, according to another source, transactions on Freecharge have declined to three-four lakhs per day whereas its bigger rival Paytm is clocking eight million transactions a day. Freecharge’s plan to onboard offline merchants to accept payments through its platform has also not taken off.
As we’d reported earlier, Alibaba was also in talks to buy Snapdeal but those talks never went far because the Chinese e-commerce company’s offer was “too low”.
Meanwhile, under a new leadership, Flipkart has started hiring again. Kalyan Krishnamurthy, who took over as Flipkart’s new Chief Executive Officer, is said to be hiring for top level positions.