Flipkart acquires Myntra, Snapdeal raises $100 million to compete with Amazon in India
Wednesday May 21, 2014, 10:38 AM
With a booming online retail market in India, Flipkart has finally acquired Myntra. The two companies have been in talks for a while now, and the only hurdle left was the deal structure. Mint reports that the hurdle has been overcome and Flipkart has acquired a majority stake in Myntra, valuing the online retailer at $300-$330 million. Ebay backed Snapdeal, has also raised $100 million in its latest round of funding that values the company at $1 billion, WSj reports.
Flipkart’s acquisition of Myntra was recommended by two common investors in the companies – Tiger Global Management and Accel Partners, which came as a response to Amazon’s entry into India. Myntra is expected to announce the acquisition tomorrow.
Though Amazon is currently just a marketplace, it is lobbying in the US to push Indian government to change FDI rules in retail. Meanwhile, it went on an advertising blitzkrieg with full-page advertisements in newspapers, television spots and outdoor hoardings.
Flipkart has been keeping up with Amazon’s moves, providing same-day delivery and even pre-empting Amazon by announcing Flipkart First, an annual subscription service that is expected to be similar to what Amazon Prime offers abroad. Flipkart achieved $1 billion in gross merchandise value in February. Myntra did revenues of Rs 1,000 crore last year and is aiming to double it this year.
UPDATE: Here’s Snapdeal’s press release announcing the new round of fund raising.
Snapdeal.com raises US$ 100 million
New Delhi, May 21, 2014: Snapdeal announced today that it has completed a new round of equity financing of US$ 100 million. The investors in this financing include funds managed by Temasek, BlackRock Inc., Myriad, Premji Invest and Tybourne.
“We see this financing round as another endorsement of Snapdeal’s differentiated strategy and progress as India’s largest online marketplace. We are pleased to welcome several marquee global investors as our partners and believe their association will contribute to Snapdeal’s long-term success. Our mobile and internet commerce marketplace is now connecting millions of buyers to a very large base of sellers that offer products and services of national and international brands. We will continue to focus on creating life changing experiences for the buyers as well as sellers in the Snapdeal ecosystem.” said Kunal Bahl, Snapdeal’s Co-founder and CEO.
This financing follows Snapdeal’s previous round of equity financing of US$ 133.77 million that was completed in February 2014 with participation from Snapdeal’s existing investors including eBay Inc., Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital.
Credit Suisse acted as Snapdeal’s exclusive financial advisor and Indus Law acted as Snapdeal’s legal advisor for the financing.