Flipkart raises $1.5 bn, Snapdeal takeover around the corner
07 Apr 2017
Flipkart has already raised $1.5 billion from Tencent, Microsoft and eBay as buyout talks with Snapdeal are progressing fast, VCCircle reports citing two persons with direct knowledge of the discussions.
India's biggest ecommerce company will raise a total of $2 billion in the current funding 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 report.
The merger and the rest of the fundraising are likely to be completed within two weeks.
''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 does not comment on market speculation while SoftBank declined comment. Spokespersons of Tencent, eBay and Microsoft did not immediately respond to email queries. Snapdeal, too, did not respond to a query on the merger talks.
Ever since Flipkart's fresh fundraising talks surfaced nearly two months ago, 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. Other reports this week said that Flipkart was set to raise $1.5 billion by next week.
The media had reported that SoftBank, which invested around $900 million in Snapdeal and is the major stakeholder in the company as well as digital payments platform FreeCharge, is planning to invest around a $1.5 billion in Flipkart for a double-digit percentage stake in the Bengaluru based marketplace.
SoftBank 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 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 VCCircle sources.
