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Business News/ Companies / News/  Flipkart’s aggressive plans in 2015
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Flipkart’s aggressive plans in 2015

India's largest e-commerce firm plans to invest or acquire 15-20 firms in 2015 as it seeks to add to its own offerings and build a venture capital firm

Flipkart is looking at acquisitions to not only boost its growth, but also to add technology expertise and help build infrastructure for India’s fledgling e-commerce business. Photo: BloombergPremium
Flipkart is looking at acquisitions to not only boost its growth, but also to add technology expertise and help build infrastructure for India’s fledgling e-commerce business. Photo: Bloomberg

India’s largest e-commerce firm Flipkart Ltd plans to invest in or acquire 15-20 companies in 2015 as it seeks to add to its own offerings and also build a venture capital firm-like portfolio of investments, three people familiar with the matter said.

Flipkart is in talks to buy a large stake in mobile advertising firm AdIQuity Technologies Pvt. Ltd, two of the three people said. Flipkart may also pick up a stake in marketplace and auctions start-up WeHive Technologies Pvt. Ltd, the two said. All the people spoke on condition of anonymity.

Flipkart declined comment. AdIquity and WeHive did not respond to emails seeking comment.

AdIquity started out in 2006 as a search engine under the name Guruji.com. After raising $15 million from Sequoia Capital and Sandstone Capital, it changed its business model and became a mobile advertising company. WeHive started out earlier this month as an eBay Inc.-styled marketplace and auctions site.

Mint couldn’t ascertain the size of the two proposed deals.

Flipkart is looking at acquisitions to not only boost its growth, but also to add technology expertise and help build infrastructure for India’s fledgling e-commerce business. The company is also looking at picking up stakes in start-ups not directly related to its operational requirements but are attractive investments which may significantly increase in value over time, two of the three people cited above said.

Flipkart has made three acquisitions and financial investments this year. It bought Myntra for an estimated value of more than $330 million in May and invested in payment gateway and mobile marketplace ngpay and Jeeves Consumer Services Pvt. Ltd, which provides after-sales services on large home appliances and electronics.

Though Flipkart chief executive Sachin Bansal said in July that the company was looking at acquisitions in logistics, technology, mobile and other e-commerce sites, it hasn’t acquired as many companies as some investors expected. Now, flush with funds, and with a mergers and acquisitions (M&A) team in place, Flipkart is identifying targets and closing deals.

Flipkart, which has received nearly $2 billion in funds from investors this year, hired Nishant Verman from venture capital firm Canaan Partners to head its M&A team in July.

“Flipkart will do at least 15-20 deals in the coming year, and probably more. There will be a mix of strategic and financial investments. It is looking at having a presence in all key parts of the ecosystem. And it doesn’t necessarily have to pay cash; its stock is highly valuable," one of the people cited above said.

Flipkart’s rivals, Snapdeal and Amazon India, too, have set up M&A teams and hired former venture capitalists for identifying both acquisitions and financial investments. Snapdeal bought two small technology firms, Wishpicker and Doozton this year, and Mint reported on 18 December that the online marketplace is in talks to buy Unicommerce eSolutions Pvt. Ltd, an e-commerce management software and fulfilment solution provider. Amazon India picked up a minority stake in gifting card technology provider QwikCilver Solutions Pvt. Ltd earlier this month.

With all the three top e-commerce firms in India aggressively looking at acquisitions, competition for targets will increase and drive up valuations of the most sought-after start-ups, analysts said.

Flipkart and Amazon had expressed interest in investing in both Jeeves Consumer and QwikCilver, several people aware of the matter said. Eventually, Jeeves Consumer chose Flipkart while QwikCilver picked Amazon, the people said.

Unicommerce, too, had agreed to an investment deal with Flipkart investor Tiger Global Management, only to shun it at the final stage in favour of discussions with Snapdeal, the people cited above said. Kunal Bahl and Rohit Bansal, the top two executives and co-founders at Snapdeal, had previously invested in Unicommerce.

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Published: 29 Dec 2014, 11:56 PM IST
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