Alibaba Group in talks to acquire stake in Flipkart

After backing eRetail giants Paytm and Snapdeal, the Chinese conglomerate is now exploring opportunities to acquire stake in one of India's largest online marketplace Flipkart.
Alibaba Group

Chinese eCommerce giant, Alibaba Group which has a very affirmative eye on Indian eCommerce landscape now aims to further strengthen its foothold in country. After backing eRetail giants Paytm and Snapdeal, the Chinese conglomerate is now exploring opportunities to acquire stake in one of India’s largest online marketplace Flipkart.

As of now, the deal is in its initial talking stage and the possibility depends on Flipkart’s willingness to offer discount on its current market value i.e. $15 billion. The company is also talking to Snapdeal and wants a discount on the firm’s current valuation of $6.5 billion.

Both Flipkart and Snapdeal which is run by Jasper Infotech Pvt. Ltd are India’s highest valued eCommerce firm and hence there are not too many takers. Though both these online firms have sufficient funds to manage their current burn rates for at leat 12-15 months, but still in order to restock their cash crypt they will have to seek funding by the end of this year.

Flipkart’s valuation has soared five times to $15 billion since May 2014 when it raised $210 million from DST Global, Tiger Global Management and others. Snapdeal’s valuation has increased more than 6 times since it raised $100 million the same month. Since then, Flipkart has raised $2.4 billion while Snapdeal has raised more than $1.3 billion.

If things go as planned for Alibaba Group, it will position them in the list of 3 most prominent investors in the country along with SoftBank Group and Tiger Global Management.

According to company’s quarterly earnings report, the Chinese firm has cash and cash equity of around $17 billion by the end of Dec, 2015.

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