According to news reports, online retailer Flipkart has approached rival Myntra with a merger proposition. The deal is said to have been driven by the larger, common investors behind the two Bangalore-based e-tailers, a leading daily reported. The development takes place amidst news of as Myntra sealing a $50-million (around Rs 300 crore) fund raised from a consortium of investors led by Premji Invest.
US hedge fund Tiger Global and venture capital firm Accel Partners are the two common investors, holding significant shares in both Flipkart and online fashion specialist Myntra.
The Flipkart offer is essentially an acquisition but involves keeping Myntra as a separate unit, with the current management running the business with synergy benefits of controlling the domestic online fashion ecosystem. Myntra's Co-founder Mukesh Bansal and smaller investors like IDG Ventures and Kalaari Capital prefer raising another round of funds rather than selling off the company right now. But a final decision will be taken within two weeks as Myntra founders and investors take a decision "most comfortable with everyone".
The report has been denied by Myntra’s Bansal, while Sachin Bansal, Co-Founder, Flipkart said he would not comment on market speculation. Tiger Global and Accel Partners could not be reached for immediate comments.