Deal unlikely now, though.
By Dileep Thekkethil
The Indian e-commerce major Flipkart considered selling itself to US-based Amazon, reported The Economic Times.
According to ET, almost half a dozen sources, largely investors, said Flipkart and Amazon till lately were discussing about a possible merger.
But, the report emphasized that such a deal is unlikely to happen as the talks had now reached a dead end following both companies failing to see eye-to-eye.
The report claims that the talks were active until the last quarter of 2015, but it is still unknown who initiated the talks. It is believed that one of the major investors of Flipkart was behind the closed door discussions with Amazon.
The Bengaluru-based e-commerce giant has itself denied the claim that it is up for sale or that it is in the market for capital.
Binny Bansal, who recently took charge as the CEO of the company after the founder Sachin Bansal stepped down and took the role of chairman, denied rumors that the most valued startup in India is up for sale.
“All rumors of the potential sale and down rounds are false and baseless. Flipkart continues to be the market leader in India and we are in this business for the long haul,” Bansal said.
According to the ET report, Amit Agarwal, the head of Amazon India, declined to respond to e-mail questions. A spokeswoman for Tiger Global Management, the largest shareholder in Flipkart, declined to comment.
Sachin and Binny own just 7 percent stake in the company. Sources, according to ET, said that Flipkart has enough funding to run for another 18 months at the current burn rates.
All major e-commerce companies in India including Flipkart registered a huge loss in the third quarter of the current fiscal. This was followed by major fund providers slashing their investments in Indian e-retail market.
1 Comment
I am telling these things from long back that Flipkart can not survive long because of their sudden growth due to discounted business model. Only self funded organisation like ShopClue, InfiBeam and Buyonkart can survive Indian market. All vendor should accept this fact. Flipkart business model is not sustainable model at all.Wait till 2020, competition will be not easy for amazon also to find self funded organisation.