Flipkart in talks to buy stake in Bookmyshow

DEAL DETAILS Bookmyshow is likely to be valued at $500700 million if the proposed deal goes through

NEWDELHI/BENGALURU: Flipkart Ltd is in talks to buy a large minority stake in ticketing platform BookMyshow, as India’s most valuable internet firm seeks to improve customer stickiness and gain a higher share of spending by urban Indians, according to three people familiar with the matter.

The online retailer wants to invest fresh capital into BookmyShow (Bigtree Entertainment Pvt. Ltd) as well as buy shares from some of its investors, the people cited above said on the condition of anonymity.

Bookmyshow may be valued at $500-700 million if the proposed deal goes through, the people said. ascertain the amount that Flipkart plans to invest in Bookmyshow, which last raised ₹550 crore in July 2016 from Stripes Group, Accel Partners, SAIF Partners and Network18, at a valuation of more than ₹3,000 crore.

Flipkart had initially expressed an intent to buy BookMyshow, one of the three people said.

But the two other people said a stake sale is more likely than an outright sale. Reliance Industries-owned Network18, which is the single largest shareholder in Bookmyshow with a 39% stake, is bullish on the firm, these two people said.

Flipkart and Bookmyshow

$ mn + May 2017 $ mn May 2014 $ mn

didn’t respond to emails seeking comment. Bookmyshow, which caters to the well-off people in urban India, is one of the very few capital-efficient and profitable internet firms.

For the year ended March 2016, the firm posted a profit of ₹3.1 crore on revenue of ₹248 crore. The last fiscal year, however, sales growth took a hit because of a push by Paytm into movie tickets.

But over the past few months, Bookmyshow has fought back and it still controls a majority of movie ticket bookings. The company, which also sells tickets for sporting events and plays, bought Burrp, a restaurant-search platform, in July.

Flipkart is seeking a deal and business partnership with BookMyshow partly to get a higher share of the spending by uppermiddle-class and rich Indians.

Compared to rival Amazon India’s Prime subscription service, Flipkart lacks an equivalent differentiator.

By striking partnerships with the likes of Bookmyshow, Flipkart wants to offer a range of services to keep customers coming back to its platform, said the people cited earlier. It also plans to launch groceries this year in order to push repeat purchases by customers.

Having raised nearly $3 billion in two tranches this year from Softbank Group Corp., Tencent Holdings and others, Flipkart plans to pursue more M&A deals.