Flipkart, India’s biggest online retailer acquirers Letsbuy, India’s 2nd largest online retailer, for an undisclosed amount. Flipkart co-Founder and CEO Sachin Bansal said that the acquisition opportunity came at a very attractive price. According to couple of reports buyout amount seems to be around $20 – $25 million, which is roughly 100 to 130 crores Indian rupees. By this deal, both companies has greater opportunity to expand faster, giving the combined entity a much larger share in the consumer electronics market. The acquisition is a combination of cash and equity. The founders of Letsbuy along with their 350+ team members will continue to function independently, with the added advantage of now being able to access Flipkart’s superior technology platform and supply chain capabilities.
Flipkart’s co-founder and CEO Sachin Bansal speaking about the acquisition, “This acquisition fits into our strategy of building dominant shares in all categories we operate in. We are already leaders in the books and media verticals. Given that we managed to build a leadership position in consumer electronics as well since its launch in early 2011, it made sense for us to consolidate when we saw this opportunity. This acquisition opportunity came at a very attractive price for us and the timing has also been ideal. The synergies will now allow us to accelerate faster and get to a share similar to what we enjoy in the online books category”.
Letsbuy.com founder & CEO Hitesh Dhingra said “Letsbuy.com has experienced a phenomenal growth in the last one year and holds a dominant position in e-commerce industry in India. We believe that our expertise in 3Cs* category matched with Flipkart’s superior technology and supply chain could be a killer combination. The Company had a choice to raise a large round of funding as well, however aligning our business with the largest player in the market made sense as the resultant synergies will guarantee our customers the best possible service, price and selection. ”
By this buyout Flipkart has becomes the most promising and biggest of all retailers in India. With the entry of Amazon in Indian market as Junglee, it seems Flipkart will surely will give a competition for Amazon when they start operating full-fledged.
What do you think about this acquisition, do comment your views on it?