India’s Flipkart confirms $1.4b downround
Indian e-commerce giant Flipkart has confirmed an investment of $1.4 billion from Microsoft, eBay, and China’s Tencent Holdings at a post-deal valuation of $11.6 billion, down from $15 billion as of its previous round.
In addition to participating in the round, eBay will sell its India business to Flipkart. EBay India will continue to operate as an independent brand within Flipkart, according to a statement. Flipkart and eBay have also signed an exclusive cross-border trade agreement that will give each company’s customers access to the other’s inventory.
The round is the largest in Flipkart’s history and the first following last year’s series of markdowns by US-based mutual funds including Fidelity, Morgan Stanley and T. Rowe Price. Media reports based on these markdowns had put the company’s valuation as low as $5 million, though Flipkart had downplayed the significance of the announcements. The methods by which mutual funds value their portfolio companies are not known.
Flipkart also battled internal pressures over the past year, with several senior executives departing. The company has changed CEOs twice since January 2016, with Binny Bansal replacing his co-founder Sachin Bansal and being replaced in turn a year later by Kalyan Krishnamurthy, a former managing director at the company’s largest backer Tiger Global Management.
Since its founding in 2007 Flipkart has raised multiple funding rounds, most recently a $700 million investment in 2015 by existing investors including Morgan Stanley and Tiger Global. The company operates an online marketplace for products ranging from consumer electronics to clothes and footwear, and claims to have 100 million registered users and 100,000 sellers.
Flipkart faces strong competition in India’s fast-growing e-commerce market from US-based rival Amazon, which last June took the lead over both Flipkart and domestic competitor Snapdeal in gross merchandise for the first time.
Snapdeal is also struggling, and in recent months media reports have indicated the company’s backers, led by Japan’s SoftBank, are in talks with Flipkart to merge the two companies. SoftBank reported last year that it had marked down the value of part of its investment portfolio, including Snapdeal and Indian ride-hailing app Ola.
More on South Asia
Latest News
Asian GPs slow implementation of ESG policies - survey
Asia-based private equity firms are assigning more dedicated resources to environment, social, and governance (ESG) programmes, but policy changes have slowed in the past 12 months, in part due to concerns raised internally and by LPs, according to a...
Singapore fintech start-up LXA gets $10m seed round
New Enterprise Associates (NEA) has led a USD 10m seed round for Singapore’s LXA, a financial technology start-up launched by a former Asia senior executive at The Blackstone Group.
India's InCred announces $60m round, claims unicorn status
Indian non-bank lender InCred Financial Services said it has received INR 5bn (USD 60m) at a valuation of at least USD 1bn from unnamed investors including “a global private equity fund.”
Insight leads $50m round for Australia's Roller
Insight Partners has led a USD 50m round for Australia’s Roller, a venue management software provider specializing in family fun parks.