In a move that’s sure to shake up the e-commerce sector, online biggie Flipkart has acquired ebay India, besides also raising $1.4 billion from eBay, Microsoft and Tencent in the biggest round of funding by an Indian Internet company.
Flipkart, however, didn’t disclose the amount it forked out to purchase Ebay India. Offering some details of its agreement with eBay, the company stated in a statement:
In exchange for an equity stake in Flipkart, eBay is making a cash investment in and selling its eBay.in business to Flipkart. eBay.in will continue to operate as an independent entity as a part of Flipkart. Flipkart and eBay have also signed an exclusive cross-border trade agreement.
With the latest round of investment, Flipkart’s valuation now stands at a massive $11.6 billion.
The company’s partnership with Microsoft was first announced earlier this year when the software giant’s CEO Satya Nadella was on a visit to India. However, the deal with China-based Tencent, which owns messaging app WeChat and has invested in various online entities, is the more intriguing one.
With the help of its Chinese investor, Flipkart could possibly try to make inroads into the digital payment arena or strengthen its existing payment division.
Flipkart statementTencent joins as a strategic investor, bringing experience in linking social networking and e-commerce. As a leading provider of internet value-added services in China, Tencent has been at the centre of innovation in social, payments and other areas.
Flipkart’s purchase of eBay India comes on the back of reports suggesting that the e-commerce firm is also on the verge of taking over desi rival Snapdeal, with an announcement likely in May.
The eBay India acquisition therefore raises the imminent prospect of halving down the number of e-commerce players in India. If the supposed Flipkart-Snapdeal merger does go through, we’ll have Amazon, Flipkart and possibly Paytm as the trio competing for space and the interest of Indian online buyers.
(This post has been corrected. An earlier version incorrectly stated Flipkart’s valuation.)