News about Flipkart s fresh funding has been doing rounds for quite some time now. The e-commerce company was last known to raise $1.5 billion (Rs 10,040 crore approximately) from potential investors like Microsoft, eBay, PayPal, Google Capital and Tencent Holdings. A new report now says that among the investors, eBay and Tencent Holdings are leading in funds for Flipkart. It is also said that the investment by eBay could lead to its Indian arm merging with Flipkart altogether. Also Read - iPhone 11, iPhone XR up for grab with massive discount on Flipkart Big Saving Days saleAlso Read - Flipkart Big Saving Days sale begins: Pixel 4a, Realme X7, Samsung Galaxy F62, more on discount
This proposed funding would lead Flipkart to a stand where it can compete with its main rival Amazon. It will also help Flipkart go against China s Alibaba who is looking into entering the Indian market. ET reports that Flipkart s funding talks with eBay are at an advanced stage now and this investment could lead to the former either acquiring or merging with the latter. The report further stated that eBay could be investing up to $500 million, thereby acquiring majority stake in the company. It is also suggested that a third investor could participate in the funding round. The third investor could be among Microsoft, PayPal or Google Capital, companies that have been known to be involved in Flipkart s funding talks.
The $1.5 billion funding for Flipkart was said to put the company at a valuation of $10-12 billion, which is actually lower than its last funding around 18 months ago wherein the company was valued at $15 billion. But if the funding talks do turn out to be true, then it would give the company a major boost against arch rival Amazon which received Rs 7,000 crore from its parent company in 2016. It would also make Flipkart stand strong against new entrant Alibaba which recently invested $177 million for Paytm Mall. In response to our queries, a Flipkart spokesperson said, As a company policy, we do not comment on market speculations . ALSO READ: Paytm launches new e-commerce platform Paytm Mall
Flipkart has been going through a tough couple of months with the company reporting a loss of Rs 2,306 crore in fiscal year 2016. Flipkart s loss in 2016 was the double of what the company reported in fiscal year 2015 which was Rs 1,096 crore. Prior to the funding talks, Flipkart had also recently restructured its top management with Kalyan Krishnamurthy as its new CEO. Krishnamurthy is a former Tiger Global executive, who is currently the largest shareholder of Flipkart. ALSO READ: Kalyan Krishnamurthy is Flipkart s new CEO, Nitin Seth to serve as COO
The reported funding and suspicions about possible merging of eBay with Flipkart would also benefit eBay whose business has not been able to catch up with the latest e-commerce trends in India. eBay had entered the Indian market back in 2004 but was soon pushed down with majors like Amazon and Flipkart taking control. The company then invested $134 million in Snapdeal back in 2014 which had been brought down with funds from Foxconn and Alibaba in 2015. ET reports that eBay s current stake in Snapdeal has gone down to a mere 6 percent.
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