India’s top shopping website Flipkart has acquired 100% stake in one of India’s top e-commerce platform for fashion and lifestyle products – Myntra. The deal was announced at Myntra’s office in Bangalore, but Flipkart didn’t reveal the deal size. It’s expected that Myntra deal could be valued at more than $250 million (Rs 8,000 crore) at least in the form of cash and stock.
“It is a 100 per cent acquisition and going forward, we have big plans in this segment. Flipkart and Myntra are getting together to create one of the largest e-commerce stories and together we will dominate the market” said Flipkart co-founder and CEO Sachin Bansal.
Even after the acquisition Myntra will continue to run as a separate and independent entity with its co-founder and CEO Mukesh Bansal joining Flipkart board and heading the fashion business. There also will be no change in the company structure, employees and functioning of Myntra. In addition to this acquisition Flipkart plan to invest $100 million in further developing the fashion business.
Bangalore-based Myntra was established by four IIT alumni – Mukesh Bansal, Ashutosh Lawania, Imran Khan and Vineet Saxena in February 2007 and it become one of India’s leading online fashion store. The deal came after the two shopping site’s common investors Tiger Global Management and Accel Partners pushed for the acquisition.
“Flipkart is the most powerful e-commerce brand in India and has a very ambitious agenda to build the next generation of retail in India. Leveraging mutual strengths, we will build Myntra into India’s leading fashion powerhouse and create many original fashion brands,” said Mukesh Bansal, co-founder and CEO of Myntra.
The Indian e-commerce market was worth $13 billion (Rs 75,000 crore) in 2013 and its growing in an exponential rate. With this acquisition Flipkart can confidently face the tough challenge from the world’s biggest online retailer Amazon, along with Ebay backed Snapdeal.
It’s not the first time Flipkart going for a high profile buy out, back in February 2012 Flipkart acquires Letsbuy which was at that time India’s 2nd largest online retailer, for an undisclosed amount.