Flipkart strengthens its war chest in the war for supremacy

After a hiatus of nearly two years, Flipkart, India’s largest e-commerce firm has raised US$1.4 billion in the latest round of funding. This is the biggest single round funding that any Indian startup has got till now surpassing the record set by Flipkart only when it raised US$1 billion in July 2014.

The US$1.4 billion round is led by Tencent with an investment of US$700 million. While Flipkart raised US$500 million from eBay Inc., it also acquired eBay’s India operations for US$200 million. Flipkart also got a funding of US$200 million from Microsoft, with which it also signed an agreement recently to make Azure (Microsoft’s cloud platform related product) the etailer’s exclusive public cloud platform.

With Amazon.com Inc. breathing down its neck, the fresh round of funding might create more pressure on Flipkart as it would have to justify the funding by trying to protect market share and reduce cash burn as well. While the funding might help Flipkart in its latest pursuit of Snapdeal, Flipkart will be walking on tight rope.

In addition to the fresh round of funding and acquisition of eBay India, Flipart and eBay have also signed an exclusive cross-border trade agreement, which will allow sellers on Flipkart to expand their sales globally and vice-versa. It will be interesting to see how Flipkart can utilize its newly minted war chest in the battle for supremacy in the Indian e-commerce space.