India’s largest e-tailer Flipkart is in talks to acquire a majority stake in navigation and tracking solutions provider MapmyIndia, whose venture capital investors are looking for an exit, said a report in The Economic Times. Bangalore-based FlipKart is also looking to exit the e-books business, as it plans to focus more on retailing physical goods, another report in ET said.
The negotiations between FlipKart and Delhi-based MapmyIndia, owned by CE Info Systems Pvt Ltd, for the proposed stake sale started about a month ago, when the current promoters finally decided to exit the company. Besides key venture capital investors Lightbox Ventures and Nexus Venture Partners, MapmyIndia is also backed by Qualcomm Ventures, the venture investment arm of the US-based telecom giant Qualcomm, and Japanese map publisher Zenrin.
Although the deal size could not be ascertained, industry insiders peg the acquisition at about $60-75million (Rs 400- Rs 500 core). With the acquisition of MapmyIndia, FlipKart intends to further leverage and strengthen its logistics and customer analytics.
Established in 1992 by Rakesh Verma and Rashmi Verma, MapmyIndia provides digital map data, navigation, tracking, global positioning system (GPS) and geographic information systems (GIS) based systems integration services.
MapmyIndia, which has all the major car makers in India as its clients, claimed in a PTI report that its order book doubled to Rs 200 crore in the last fiscal from Rs 100 crore a year ago. Off late, the company has been aggressively focusing on tapping the fast-growing e-commerce platform to sell its products such as GPS navigation, tracking and entertainment systems.
Meanwhile, Flipkart is also looking to exit its e-books business, the move which is contrary to its rival Amazon’s strategy to push sales of books through the online platform in India. The company is evaluating its e-books strategy and is working towards redefining digital offerings to customers, FlipKart said in a statement on Tuesday.
Flipkart entered the books retailing category through its digital store Flyte in November 2012 with an aim to change the reading habits of Indian book lovers. Later in 2013, the company also launched an eBook app for reading books on mobile as well.
The company’s decision to exit e-books business seems quite evident from its move to end the distribution contract with self-publishing website Smashwords last month. Flipkart had tied up with self-publishing platform Smashwords in 2013, to sell more than 200,000 e-books through a new app it had launched. Smashwords is one of the largest distributors of e-books written by independent authors, worldwide.
In contrast, FlipKart’s rival Amazon is all set to cash in on the tremendous potential in India’s e-books business. Recently, Amazon introduced Kindle unlimited offer, which customers can subscribe to read books for just a monthly fee of Rs 199. If FlipKart exits, Amazon will undoubtedly dominate the e-books market in India.