Homegrown e-commerce giant Flipkart is in early talks to buy a large minority stake in online ticket booking company BookMyShow, as it seeks to attract more people and retain old customers.
Flipkart wants to invest fresh capital into BookMyShow and also buy shares from some of its investors. But, there were no reports on the amount that Flipkart plans to invest in BookMyShow, Economic Times reported.
The last round of funding for BookMyShow came from Stripes Group at Rs 550 crore, which was one of the largest funding rounds for any internet company this year. Accel Partners, SAIF Partners and Network18 also funded the company at a valuation more than Rs 3,000 crore.
Accel is an investor in Flipkart as well. According to the reports, Flipkart had initially planned to buy BookMyShow. However, a stake sale is more likely than an outright sale.
Reports said last month BookMyShow posted a profit of Rs 3.17 crore for the financial year 2016. But this profit came after the company reported losses for two consecutive fiscal years. It had posted Rs 13.52 crore loss in fiscal year 2015 and Rs 3.98 crore loss in FY14.
The sales growth took a hit mainly because of a push by Paytm into movie tickets. But over the past few months, BookMyShow has limped back to growth and it still controls a majority of movie ticket bookings.
Now, a partnership with the ticketing market leader BookMyShow will give Flipkart, which is also building its payment platform Phonepe, a big role in the ticketing market.
BookMyShow is also focusing on local language content for both its video and audio platforms to penetrate tier 2 and tier 3 cities, a move that will be helpful for Flipkart as it seeks to serve deeper in the smaller areas.
Flipkart - India's most acquisitive company
Filpkart has raised nearly $3 billion in two tranches this year from SoftBank Group Corp, Tencent Holdings and others. The online retailer plans to pursue more Mergers and Acquisitions (M&A) deals.
Last month, Flipkart bought F1 Info solutions, which offers repair services for mobiles and electronics, for an undisclosed amount.
Flipkart is India's most acquisitive internet firm. Since 2007, it has bought more than 20 companies. Its largest acquisition till now is that of online retailer Myntra for more than $330 million in May 2014. Earlier this year, the company also tried to buy its smaller rival Snapdeal, but the deal failed because of differences over valuation.