Flipkart reportedly raises $1bn from Microsoft, eBay and Tencent Holdings

By : |March 21, 2017 0

After a short lull, Indian e-commerce giant, Flipkart once again looks all geared up with a beefed up war chest to take on its rivals.

Amidst ever increasing competition and several fundraising speculations, the startup has reportedly raised $1 billion from Microsoft, eBay and Tencent Holdings.

Citing sources familiar with the development, Bloomberg reported that Flipkart has raised $1 billion but at a much lower valuation than its previous high of $15 billion.

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However, analysts believe that considering the latest markdowns by key investors like Morgan Stanley, T Rowe and others, a $10 billion valuation “is not half as bad.”

Furthermore, the report says that Flipkart is planning to build $1 billion more in next few months.

Flipkart had a tumultuous 2016. The startup not only struggled with many top-level executive-exits but also markdowns by many investors. A mutual fund managed by Fidelity Investments lowered the value of its investment in Flipkart by 36 percent to $5.56 billion. Morgan Stanley valued Flipkart at $5.57 billion in September 2016.

However, the new investment is expected to help Flipkart turn the tables around once again and be able to compete with Amazon India who has been going very aggressive with huge capital infusion.

The Indian e-commerce battleground is getting hotter by the day. Amazon, Flipkart’s arch-rival has already pledged to spend $5 billion on its India operations over the next few years. Paytm E-commerce Pvt, the company that defeated eBay and Amazon in China, has also joined the race. Alibaba also backs Snapdeal.com, Flipkart’s biggest homegrown competitor.

To fight its strong competitors, Flipkart will have to roll up its sleeves and persuade investors to back it with more capital.

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