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In one of the biggest fundraising events in the Indian eCommerce industry, Flipkart announced that it has raised $1.4 billion from Microsoft, eBay and Tencent. Also, Flipkart stunned everyone by buying the Indian operations of the rival eBay.
These flurry of moves exhibited by the largest online retailer in the country is aimed at building a “mahagathbandhan” to counter the rising online retail giant “Amazon”.
The Collective Deal of $1.4 Billion
The deal of $1.4 billion or Rs. 9000 Crore is a joint effort led by Tencent, which hails from China. Tencent made an investment of $700 million, while the eBay Inc. will make a contribution of $500 million. In return, the ebay Inc. will receive the stock of Flipkart worth $200 million in lieu of the Indian operations.
Microsoft also recently signed an agreement with the Indian online retailer Flipkart, according to which, Flipkart will make Azure its exclusive public cloud platform. For all this, Microsoft will put $200 million to round off this colossal deal.
It is indeed a landmark deal not only for Flipkart and for India as well, as it endorses the country’s tech prowess, the potential that we possess to disrupt traditional markets and the innovative mindset. While announcing the deal on Monday, 10th April, the founders of Flipkart Binny Bansal and Sachin Bansal, also talked about the country’s technical competence. They also mentioned that this deal is a resounding acknowledgement that the Indian tech ecosystem is not just thriving, but also succeeding in solving the problems which the people
Snapdeal’s Deal is the Next Awaited Acquisition by Flipkart
As the industry insiders are speculating, the Flipkart may next acquire Snapdeal. After it acquired Jabong, Myntra and eBay, the next merge that is being widely speculated is of Snapdeal with Flipkart to outflank Amazon.
Flipkart may get some more capital from the Japan’s Softbank once the Snapdeal’s sale goes through. Softbank Group Corp is the largest investor of Snapdeal, and once the Snapdeal goes under Flipkart, Softbank may put in more cash.
Flipkart Funding A Major Victory for Kalyan Krishnamurthy
This funding round marks a major victory for Kalyan Krishnamurthy, the new Chief Executive of the firm. He led these turnaround efforts after he rejoined the company in June last year. With this deal, the pressure on the Krishnamurthy of carrying out the much delayed IPO (Initial Public Offering) of Flipkart has also increased significantly.