Indian e-commerce start-up Flipkart Group has raised US$1.4 billion from Microsoft Corp., eBay Inc. and Tencent Holdings Ltd., taking a hit to its valuation to raise the cash it needs to defend its home market from Amazon.com Inc., the Wall Street Journal reports.
Flipkart, which was started in 2007 by two former Amazon employees, said Monday that the new investment values the Bangalore company at US$11.6 billion.
That allows Flipkart to retain its title as India’s most valuable startup but is still a step down from the US$15 billion valuation it received during fundraising in 2015.
“This is a landmark deal for Flipkart and for India,” Flipkart founders Sachin Bansal and Binny Bansal said in the statement, calling it the company’s biggest fundraising round ever.
Flipkart said Chinese internet firm Tencent led the round, but a Flipkart spokeswoman declined to provide a breakdown of investments by company.
Separately, eBay said on Monday that it was selling its Indian business to Flipkart and was making a US$500 million cash investment in the start-up for an equity stake.
India’s e-commerce market was worth about $16 billion last year but should grow to $48 billion by 2021, according to an analyst.
Amazon has pledged to spend US$5 billion in its rapid roll-out in India, which started in 2013. It has used its massive war chest and technology and logistics know-how to gobble up market share, already reaching the No. 2 spot behind Flipkart in terms of sales.
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