Even as Amazon is pumping millions of dollars into its Indian venture, Indian e-commerce companies are looking for options to cope with the competition. Just a few days ago, Flipkart reportedly raised $1 billion, and was even rumored to take over ebay s India business — a move that hinted at a possible trend of consolidation in the ecommerce space. Now, there are strong hints that Flipkart and Snapdeal will enter into a merger deal, allowing a joint entity to tackle the competition. Also Read - Flipkart Big Diwali Sale begins October 28: Best deals, discounts, offers on smartphonesAlso Read - Vivo Y3s (2021) with MediaTek Helio P35 SoC launched in India, priced under Rs 10,000
Japanese giant SoftBank is facilitating a merger between Snapdeal and Flipkart. An ET report claims that SoftBank is likely to pump $1.5 billion into a joint entity with a roughly 15 percent stake. It is worth noting that SoftBank has more than 30 percent stake, and is one of the biggest investors in Snapdeal, which drew valuation at $6.5 billion in 2016. According to the report, the merger deal will also feature another $1 billion share from Tiger Global, which is believed to be the biggest investor in Flipkart. Also Read - Flipkart Big Diwali Sale begins today: Best deals on smartphones, smart TVs, home appliances
“SoftBank and Flipkart have agreed on the broad contours of the deal. If these terms stay on track, it’s likely that the talks will culminate into a definitive transaction by late April,” ET quotes a person familiar to the matter. Snapdeal has declined to comment on the report. BGR India has also reached out to Flipkart for more information on the same. ALSO READ: Flipkart reportedly raises $1 billion in fresh round of funding from Tencent and Microsoft
That said, it s not the first time a Snapdeal-Flipkart merger deal report has surfaced online. Back in August last year, there were reports that Snapdeal was looking at merger talks with rivals Flipkart and even Amazon. A few months later there were also reports about Snapdeal merging with Paytm. ALSO READ: Snapdeal categorically denies any sale talks with Flipkart, Paytm
While Flipkart appears to have held the ground amid the intense competition, the smaller players, especially Snapdeal, have faced the music. In an already cash-starved space, Snapdeal has been working on restructuring the company in a bid to revive itself. However, this forced the company to reportedly lay off around 600 employees. According to a Hindu report, Snapdeal is left with cash that will last for the next 10-12 months at most.