Indian e-commerce company Flipkart on Monday announced that it has raised $1.4 billion from Tencent, eBay and Microsoft, valuing the 10-year-old company at $11.6 billion. Simultaneously, Flipkart is also buying eBay's India business, marking yet another acquisition.
Flipkart co-founders Sachin Bansal and Binny Bansal called it a "landmark deal."
The three investors said the investment would further drive the Indian e-commerce business.
"This strategic partnership enables Tencent to participate in the exciting opportunities in e-commerce and payments in India. We look forward to helping Flipkart to deliver compelling experiences to users throughout India, and to contribute to the development of the internet ecosystem there," Martin Lau, president,Tencent, was quoted as saying by Flipkart in a statement.
Devin Wenig, President and CEO of eBay Inc., said the investment will "allow us to accelerate and maximize the opportunity for both companies in India."
Flipkart will buy eBay India as part of the agreement announced on Monday. "In exchange for an equity stake in Flipkart, eBay is making a cash investment in and selling its eBay.in business to Flipkart. eBay.in will continue to operate as an independent entity as a part of Flipkart," according to the statement.
Flipkart now owns Myntra, Jabong, PhonePe, Ekart, MapMyIndia and FX Mart, in addition to eBay India.
The total investment in Flipkart prior to the latest funding round was $4.71 billion by investors that include HDFC Bank, Accel Partners, Morgan Stanley, Tiger Global Management IDG Ventures and DST Global.
For the financial year 2015-16, Flipkart incurred losses of Rs 5,768.8 crore on total sales of Rs 15,403 crore.
Flipkart is facing intense competitor from American e-commerce company Amazon in India even as there is a buzz of another homegrown online marketplace Snapdeal going through a tough time.