While Flipkart is looking at acquiring rival eBay’s India operations as part of its $2 billion funding plan, another e-commerce major Snapdeal is planning to exit its TV shopping joint venture with DEN Networks.
Flipkart looks to acquire eBay India operations
eBay’s India unit, which has been lagging behind local competitors and Amazon, will get merged into Flipkart as part of the transaction.
According to a recent report by Bloomberg, Flipkart is said to have to already raised $1 billion from global giants like Microsoft Corp., EBay Inc. and Tencent Holdings Ltd. As per the report, the Indian e-commerce major is looking to raise another $1 billion to take on the aggressive competition by US-based Amazon and other local e-tailers.
The latest round, valued Flipkart at around $10 billion, significantly lower than the $15.1 billion valuation it had got in its last round.
“Even a $10 billion valuation means a lot and will go a long way in establishing India’s image among the foreign LPs who have been sceptical about exits,” a source told FactorDaily.
eBay was launched in India in 2004, however could not make a mark in the price-sensitive Indian market.
Snapdeal plans to exit TV shopping JV
As finance pressure mounts on Snapdeal, which is run by Jasper Infotech, the e-commerce major is looking to divest its stake and exiting its teleshopping business DEN-Snapdeal TV Shop, according to a Financial Express report.
DEN Networks currently holds 82.87% stake in the company, while Snapdeal has 17.13 per cent.
“The decision to exit the DEN-Snapdeal JV was taken in early 2016 as part of our periodic evaluation to determine continued alignment of investments with our business needs. In execution of the decision, we had substantially reduced our stake mid-last year. The residual stake will be divested over the next few months to complete the process of exit,” the company said.
In 2014, DEN Networks Company and Snapdeal formed a 50:50 joint-venture to launch a 24 hour teleshopping channel under the brand DEN-Snapdeal TV Shop. In July last year, DEN Networks had increased its shareholding in Marco Commerce, which operated the television channel, from 50 per cent to 82.87 per cent for Rs 6 crore.
Last month faced by severe cash crunch Snapdeal also shut down its C2C marketplace Shopo last month in a bid to consolidate its offerings and conserve cash.