Flipkart in talks to buy eBay India

By

Maverick Martins

Published
Mar 28, 2017

India’s largest online retailer Flipkart is planning to acquire eBay India’s operations as part of its latest funding round of $2 billion, according to a Financial Express report.

Last week Flipkart raised $1 billion and further aimed to raise another $1 billion in next few months. The round was reportedly closed at a valuation of $10 billion which declined from Flipkart’s $15.5 billion in 2015. The round was led by Microsoft, eBay Inc. and Tencent Holdings Ltd.

EBay is one of new investors in Flipkart’s latest funding round and takeover of its Indian operations will be a cashless transaction as part of the deal. People familiar with developments told FE that eBay has not made that much of headway in the Indian market despite its launch in 2004 and they were looking to exit from their Indian operations.

However, eBay also wanted to be part of the growing Indian e-commerce market as an investor.

The likely deal between eBay and Flipkart could signal an early consolidation in the Indian e-commerce market. This could also mean that other players with smaller marketshare and struggling to raise fresh round of funding could be taken over by the larger players.

Flipkart has until now cumulatively raised $3.15 billion with key investors being Tiger Global, DST Global, Nasper, Steadview Capital and Accel Partners.

Flipkart has been looking to raise additional round of funding for quite some time now but it had been stuck on the ground of valuation. The $15.2 billion valuation enjoyed by Flipkart in the past did not much ice with the investors as the overall e-commerce market in India had slowed down in 2016 and the company was also faced with stiff competition from the global e-commerce player – Amazon.