Flipkart raises a record $1.4 billion to take on Amazon in India

Image: EPA/Jagadeesh NV
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Flipkart’s big billion days are back.

On April 10, Flipkart announced that it has raised $1.4 billion in fresh funding and also acquired e-Bay India. This is the biggest-ever amount raised by an Indian internet company in a single funding round, beating the $1 billion that Flipkart itself raised in 2014.

In the latest funding round, the company received investments from Chinese internet firm Tencent, American online retailer eBay, and software giant Microsoft, Flipkart said in a statement on its website.

“The investment by eBay is accompanied by a strategic commercial agreement with Flipkart. In exchange for an equity stake in Flipkart, eBay is making a cash investment in and selling its business to Flipkart. will continue to operate as an independent entity as a part of Flipkart,” the company added.

The shot in the arm follows a series of mark-downs for Flipkart. During its peak glory days in 2015, India’s largest e-tailer had raised $700 million at a valuation of $15.2 billion. However, corrections in valuations became routine in 2016. The latest round of funding saw the company valued at $11.6 billion.

“This shows that once valuations are corrected, there is enough money in the market to raise funds for Indian internet companies,” said Arvind Singhal, chairman and managing director of Technopak, a retail consultancy.

The big bucks raised is also a signal to Jeff Bezos’s Amazon, which has pumped billions into building its e-commerce business in India. At last count, the American retailer had committed to spend more than $5 billion in the country over the next few years. This funding round will also allow Flipkart to build a war chest amid talk of a potential merger with rival Snapdeal, which is backed by Japan’s Softbank.