Flipkart Funding Round Raises over $1.4 Billion
After a number of months of rumors, Flipkart, the India based e-commerce giant confirmed it raised new funding of $1.4 billion at a valuation of more than $11.6 billion to battle with both Alibaba and Amazon.
This deal included some big names in the investor world including Tencent from China, Microsoft and eBay, which join already existing backer of Flipkart that include Naspers, Accel, DST Global and Tiger Global.
This investment will also give Flipkart control of eBay India, an e-commerce player that is second tier in India. The site will remain independent.
Separately, eBay, a minor investor in Snapdeal a rival of Flipkart, inked a deal to cross promote products back and forth with the services.
Flipkart now has raised over $4.65 billion to date from investors. The most recent funding round before Monday was July of 2015 that netted $700 million, which at that time valued the business at $15 billion.
The downturn since then is significant, which many were predicting, but the investment is the largest single round of new financing from a tech startup in India.
However, regardless things at the company have changed. Flipkart changed leadership last January when Kalyan Krishnamurthy a former executive with Tiger Global became CEO and it is been difficult keeping up with the volume of rumors that have been generated since then.
In March, Flipkart reportedly raised over $1 billion from different investors and had plans for another billion to come later.
The company has been linked as well to a merger agreement with Snapdeal its biggest rival. That move claims media was motivated by SoftBank an investor in Snapdeal, in an attempt to increase its competitiveness against the likes of Amazon, while also giving Snapdeal the needed springboard to return from a number of problems that included layoffs of more than 500 people during February.
While likelihood and status of other possible deals is not clear, the announcement of the Flipkart funding gives the company strategic allies to be more competitive with Amazon and Paytm, backed by Alibaba, and move on to its next e-commerce growth phase in India.
Over the past few months it appeared that Amazon and Paytm, with Alibaba’s financial support would battle it out in the India e-commerce marketplace, but with the new strategic alliances Flipkart has made in its most recent funding round, the battle in India is three-way and that should help the consumer above all.
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