Tencent, eBay and Microsoft invest US$1.4 billion in India’s Flipkart
Bangalore-based e-commerce site says the fund raising round values the company at US$11.6 billion
Tencent Holdings, operator of China’s largest online social and entertainment empire, has led a US$1.4 billion investment in an e-commerce firm in India together with Microsoft and eBay as they bet on the country becoming the world’s next major online shopping market, as domestic incomes there rise.
Flipkart Group, considered India’s leading e-commerce marketplace, confirmed on Monday it had raised the total from the three tech giants in a round that is deemed the “largest capital raised ever in the Indian internet sector”.
The latest cash injection pushes Flipkart’s post-transaction valuation to US$11.6 billion, said the Bangalore-based e-commerce company.
Launched in October 2007, Flipkart says it offers 80 million products across 80 categories and is becoming well-known for pioneering services in the country, such as cash on delivery.
Its existing investors include Tiger Global Management, Naspers Group, Accel Partners and DST Global.
“Tencent, eBay and Microsoft – all innovation powerhouses – have chosen to partner with us on their India journey. We have chosen these partners based on their long histories of pioneering industries, and the unique expertise and insights each of them brings to Flipkart,” said its founders Sachin Bansal and Binny Bansal.
“This deal reaffirms our resolve to hasten the transformation of commerce in India through technology.”
Flipkart didn’t provide the breakdown of the US$1.4 billion investment, with all three global tech giants simply named as “strategic partners”.
Hong Kong-listed, Shenzhen-based Tencent, which runs China’s most popular social app WeChat and has more than 800 million users, is expected to lend significant expertise in linking social networking and e-commerce with Flipkart’s operations.
Martin Lau Chi-ping, Tencent’s president, added: “This strategic partnership enables Tencent to participate in the exciting opportunities in e-commerce and payments in India.
“We look forward to helping Flipkart deliver compelling experiences to users throughout India, and to contribute to the development of the internet ecosystem there.”
Compared with slowing growth momentum in China’s market, e-commerce sales in India are forecast to rise from US$10 billion in 2015 to US$47 billion in 2020, according to US research group eMarketer.
The country has become the number one target for the industry’s major global players.
US-based Amazon is gearing up to make an impact there since launching its services in the country in 2013.
While Chinese e-commerce conglomerate Alibaba and its affiliate Ant Financial have already invested more than US$680 million in India’s PayTM, with a combined stake in PayTM Ecommerce exceeding 50 per cent, according to media reports. Alibaba owns South China Morning Post.