India's Flipkart secures $1.4 billion funding from Microsoft, eBay and Tencent

Flipkart, the largest eCommerce platform in India, has secured a massive Funding round of $1.4 billion -- the largest for the company so far. Investors who pumped-in money valued the company at $11.6 billion post-funding. While the valuation is lower than the company's peak valuation of over $5 billion, it is very high compared to its previous marked-down valuation.

Details of investment

The funding round was led by Microsoft and China-based Tencent, along with the participation of eBay -- one of the early movers in this space. However, eBay has invested $500 million and the rest of the money comes from two other investors.

Sachin Bansal and Binny Bansal, founders of Flipkart, said in a statement that they are delighted that innovation powerhouses such as Tencent, Microsoft and eBay have chosen to be a part of Flipkart on their journey in India. They further added that the investors were chosen based on their histories of pioneering industries, and their unique expertise.

The insights each of them bring to Flipkart was also considered before moving ahead.

Apart from the investment of eBay, Flipkart has also acquired eBay's India operations. However, it will continue to operate as an independent entity. This also paves the way for Flipkart to engage in cross-border business, which only operated in India until now. Flipkart will get access to eBay’s global inventory, while eBay’s customers will have access to Flipkart’s sellers.

Impact of funding

The funding will also boost Flipkart in its competition with Amazon India to be the leader of market share for the Indian e-commerce market. Amazon's CEO Jeff Bezos has already commitment $5 billion toward India's operations as the company has failed in China and is focusing on India, which is the largest market after the US.

The e-commerce Startup is also in position to get additional funding if the proposed acquisition of Snapdeal -- another Indian eCommerce startup -- goes through. Reports suggests that Japan-based SoftBank may invest in Flipkart and buy out some portion of Tiger Global Management, an early-stage investor of Flipkart. However, that could happen only if the Snapdeal acquisition goes through. It must be noted that SoftBank holds more than 30% interest in Snapdeal.

About Flipkart

Flipkart, founded by Sachin Bansal and Binny Bansal has raised more than $4.5 billion in a series of funding rounds, from Tiger Global Management, Naspers, Accel Partners, among others. The newly raised funding will also be helpful for the company which is planning to file an IPO soon.