Flipkart has raised $1.4 billion from eBay, Tencent, and Microsoft, and has obtained eBay India as part of its recent round of fund raising, the company declared on last week.
The latest funding round from the three global technology giants, at a post-transaction valuation of USD11.6 billion, adds to an existing group of marquee investors that include Tiger Global Management, Naspers Group, Accel Partners, and DST Global. This is the company’s biggest investment in its 10-year history.
The investment done by eBay is accompanied by a strategic commercial agreement with Flipkart. In exchange for an equity stake in Flipkart, eBay is creating a cash investment in and selling its eBay.in business to Flipkart. eBay.in will carry on to operate as an independent entity as part of Flipkart, with the business unit reporting to Flipkart CEO Kalyan Krishnamurthy.
Binny Bansal sent an internal email, a replica of which is available with us, Bansal states Flipkart’s valuation remains “healthy and in double digits”.
“These partnerships bring in a lot more than funds. They set us up to compete more aggressively through innovations. We can now collaborate deeply with eBay on cross border trade and ensure our customers have a wider selection of international products to choose from. Tencent, one of the largest internet companies in the world, and Microsoft also join us as strategic investors,” the email read.
Bansal further stated in the email that e-commerce accounts for less than 2 per cent of all retail in India and the potential for online retail alone is about $100 billion.