E-commerce major Flipkart closes in on eBay India buy in a cashless deal

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New Delhi | Updated: March 23, 2017 9:49:13 PM

People familiar with developments told FE that eBay has not made that much of a headway in the Indian market despite its launch in 2004 and they were looking to exit from their Indian operations.

 

Sources said that the Flipkart-eBay deal could be a bit puzzling as the US marketplace major is also an investor in Snapdeal, the number three player in the Indian e-commerce market. (Reuters)

Home grown e-commerce major Flipkart is in advanced talks to takeover the India operations of eBay even as it wraps up its $1 billion fund raise. eBay is one of new investors in Flipkart’s latest funding round and takeover of its Indian operations will be a cashless transaction as part of the deal. People familiar with developments told FE that eBay has not made that much of a headway in the Indian market despite its launch in 2004 and they were looking to exit from their Indian operations. However, eBay also wanted to be part of the growing Indian e-commerce market as an investor.

At the same time, sources said that the Flipkart-eBay deal could be a bit puzzling as the US marketplace major is also an investor in Snapdeal, the number three player in the Indian e-commerce market.

A spokesperson for eBay in response to a query from FE on these developments said, “eBay does not comment on rumor or speculation.” There was no response from Flipkart at the time of going to the press. eBay India also witnessed certain management churn with the country head Latif Nathani moving back to US after a stint which spanned over a decade. The company has appointed Vidmay Maini as the new country manager. The likely deal between eBay and Flipkart could signal an early consolidation in the Indian e-commerce market. This could also mean that other players with smaller marketshare and struggling to raise fresh round of funding could be taken over by the larger players. Flipkart has almost closed its latest round of funding to the tune of $1 billion with participation from new investors such as Microsoft, Tencent and eBay. However, this new round of funding has come at much lower valuation.

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Flipkart has till now cumulatively raised $3.15 billion with key investors being Tiger Global, DST Global, Nasper, Steadview Capital and Accel Partners. Flipkart has been looking to raise additional round of funding for quite sometime now but it had been stuck on the ground of valuation. The $15.2 billion valuation enjoyed by Flipkart in the past did not much ice with the investors as the overall e-commerce market in India had slowed down in 2016 and the company was also faced with stiff competition from the global e-commerce player – Amazon.

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