Flipkart Now Acquires EBay India
In a recent announcement, Flipkart acquired the eBay Indian operations in their latest funding round. Flipkart has been in the news for a long time now for resizing their business and hence are making some strategic moves in order to increase their capital valuation.
In the latest funding round, the E-commerce company raised $1.4 billion worth of funds from the renowned companies such as eBay, Tencent and Microsoft. This massive funding of Rs.9,000 Crores ($1.4 billion) is a collaborative effort from the leading Chinese company Tencent as they have contributed $700 million of funds. However, there are other leading companies such as Microsoft and Tencent. Microsoft has funded a $200 million worth funds and finally, eBay has raised $500 million and gained a stock worth of $200 million in Flipkart’s market share in lieu of the acquisition.
The Economic Times had reported this latest funding from Flipkart in the month of March 2017. During that period, Flipkart was in talks to have capital funding from eBay Inc. Flipkart in the year 2016 had a capital valuation of $15.2 billion which considerably dropped down in the year 2017. This year the company is worth an $11.6 billion in terms of the capital valuation.
The Flipkart’s founders Sachin Bansal and Binny Bansal has been in talks with the Economic Times and other publications and has been discussing with the media regarding this strategic initiative from Flipkart. The Bansal duo is very happy with the deal and is keen on achieving great profits and increase in the capital for the year ending 2017.
Flipkart has been acquiring many other online brands. Recently, they had acquired their biggest rivals Myntra, Jabong and eBay to compete with Amazon. After this recent acquisition of eBay by Flipkart, Snapdeal also would consider having some strategic plans in place to retain a number one spot in the online marketplace.
The global investors of Flipkart were keen on focusing on Indian online markets as they see a potential market in India for E-commerce business. The recent funding of Alibaba in Paytm was one the biggest move made by the Chinese company- Alibaba in order to obtain a new market for them. After Alibaba’s massive funding, it has triggered many Japanese and Chinese E-commerce companies to enter into the Indian markets through funding programs.
However, Flipkart’s capital valuation has been declined to $3.2 billion compared to the previous year. Additionally, some reputed mutual fund companies such as Morgan Stanley and T Rowe Price have a lesser than 5% of shares in Flipkart.