Raises $1.4 bn from Tencent, eBay, Microsoft
Etailer to buy eBay’s India business as part of the deal
BENGALURU: India’s largest online retailer Flipkart has closed a mammoth funding round of $1.4 billion from Tencent Holdings Ltd, eBay Inc and Microsoft Corp, in the biggest-ever startup funding round that boosts Flipkart ability to compete with arch-rival Amazon India.
Flipkart Ltd will also buy eBay’s India business as part of the $1.4 billion deal, a majority of which is in cash. The funding round values Flipkart at $11.6 billion, which is lower than its peak valuation of $15 billion but is still considered a coup for a company that had been hit by steep valuation markdowns by its own investors last year.
“This is a landmark deal for Flipkart and for India as it endorses our tech prowess, our innovative mindset and the potential we have to disrupt traditional markets,” Flipkart co-founders Sachin Bansal and Binny Bansal said in a statement.
Mint was the first to report on February 23 that Flipkart was in talks to raise up to $1.5 billion from investors including Microsoft, eBay and Tencent at a valuation of $10-12 billion.
eBay, which is also a minority investor in Snapdeal, will invest $500 million in Flipkart with the rest coming from Microsoft and Tencent, a Chinese social networking and gaming firm.
Flipkart may get additional capital soon as it is in talks to buy smaller rival Snapdeal (Jasper Infotech Pvt Ltd). Japan’s Softbank Group Corp, which is Snapdeal’s largest investor, may put in cash into Flipkart if a sale goes through, Mint reported last week.