Flipkart all set to acquire and absorb eBay India
- Author: Zachary Reyes Mar 24, 2017,
Mar 24, 2017, 17:06
Flipkart plans to raise 2 billion dollars from series of investors including fund infusion from eBay in return for its operations getting acquired by the Indian etailer giant, a Factor Daily report said.
Flipkart has been in an intense battle with Amazon to get a stronghold on the fast-growing Indian market. Late previous year Morgan Stanley had slashed its valuation by over $5 billion as losses mounted and management reshuffles continued to haunt the company. This deal would be part of a $1.5-2 billion funding round, out of which Flipkart has already secured $1 billion through Chinese firm Tencent and Microsoft.
India's startup commentators don't seem too positive about the Flipkart-eBay merger.
Earlier in March, eBay had appointed Vidmay Naini as the new country manager in place of the incumbent Latif Nathani, who moved back to U.S. after helming the position for more than a decade.
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.
The company has so far raised more than $3 billion in funding, mostly from global investors. So one can only hope that Flipkart merges some of these features, as worldwide shipping is pretty important to e-commerce users in the country.
In the recent past, Flipkart's valuation was consistently marked down by its overseas investors due to high cash burn even as profitability remained elusive. This means that the company will now own a big chunk of the e-commerce pie, although it might not necessarily be enough to take on Amazon India.
Flipkart's sky-high valuations was marked down several times previous year. The Bengaluru-based company has closed $1 Bn as a part of this round last week.