India-based e-commerce firm Flipkart confirmed yesterday it has raised $1.4bn in funding from internet group Tencent, online marketplace operator eBay and software provider Microsoft at a post-money valuation of $11.6bn.
Flipkart runs India’s largest e-commerce marketplace by sales, carrying a wide range of consumer goods. However, profitability has proven hard to come by as it has faced fierce competition not only from domestic rivals like Snapdeal but also foreign competitors like Amazon.
The funding was announced by the company alongside news that it has acquired eBay India, the local branch of eBay, which will henceforth operate as an independent Flipkart subsidiary.
Flipkart has also signed a cross-border trade agreement with eBay that will allow its customers to access eBay’s online stock inventory through the Flipkart platform while eBay India users will in return be able to buy goods from Flipkart vendors.
Tencent meanwhile will look to provide its experience in linking social networking with e-commerce. Martin Lau, Tencent’s president, said: “This strategic partnership enables Tencent to participate in the exciting opportunities in e-commerce and payments in India.
“We look forward to helping Flipkart to deliver compelling experiences to users throughout India, and to contribute to the development of the internet ecosystem there.”
The deal took Flipkart’s overall equity funding to almost $4.7bn since it was founded in 2007. Its last funding consisted of a $700m round in mid-2015 that included Tiger Global Management, Steadview Capital and, the company has revealed, Qatar Investment Authority.
E-commerce and media group Naspers is also a key backer, having first invested as part of a 2012 round Flipkart has said was sized at $255m. It held a 17.7% stake at the start of 2014 before leading a $1bn round later the same year.
The closure of the funding comes during a busy few weeks for Flipkart that may not yet be over. It is currently in ongoing talks with telecom and internet firm SoftBank to acquire Snapdeal, in which SoftBank holds a 35% stake, in a deal that would make it the dominant player in Indian e-commerce.