Photo Credit: Shah Junaid/VCCircle
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Flipkart raises $1.5 bn, inches closer to Snapdeal merger

06 April, 2017

Flipkart has already raised $1.5 billion from Tencent, Microsoft and eBay even as merger talks with Snapdeal are fast progressing, two persons with direct knowledge of the discussions told VCCircle.

However, India’s biggest e-commerce company will raise a total of $2 billion in the current round, with another $500 million coming from Japanese Internet and telecom conglomerate SoftBank. Those funds are part of the overall merger deal with Snapdeal, said the people cited above.

The merger and the rest of the fundraising are likely to be completed within two weeks, said one of the persons cited above.

“Things are moving in this direction, it would take a few weeks,” said a third person about the merger.

A Flipkart spokesperson said the company did not comment on market speculation while SoftBank declined comment. Spokespersons of Tencent, eBay and Microsoft did not immediately respond to the e-mail query. Snapdeal, too, did not respond to a query on the merger talks.

Ever since Flipkart’s fresh fundraising talks surfaced nearly two months ago, several media reports citing its discussions with the above investors and merger talks with Snapdeal have gained momentum.

A fortnight ago, Bloomberg reported that Flipkart had raised $1 billion in a down round and would raise an additional $1 billion within a few months. Financial daily Mint reported on Thursday that Flipkart was set to raise $1.5 billion by next week.

VCCircle had reported earlier that Flipkart was aiming to raise $1.5 billion, and looking to get a fourth investor other than Microsoft, eBay and Tencent to close the current round, which would also see Tiger Global making a partial exit. One of the persons cited above had said the current round valued the company at $10 billion pre-money.

SoftBank has turned out to be the fourth investor, and it would bring its portfolio firm Snapdeal to the Flipkart fold. “Flipkart is doing this because Masa is there,” said one of the persons cited above, referring to powerful Japanese investor SoftBank and its chairman Masayoshi Son. The SoftBank chairman has plans to invest up to $10 billion in India. The merger talks, in fact, were initiated seven months ago.

FreeCharge, the digital payment subsidiary of Snapdeal, would most likely be a part of the merger deal contrary to a media report, said one of the sources cited above.

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Flipkart raises $1.5 bn, inches closer to Snapdeal merger

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