eBay Acquires 5.4 Percent Stake in Flipkart

eBay Acquires 5.4 Percent Stake in Flipkart
Highlights
  • The sale of eBay India brought a gain of $167 million for eBay
  • eBay listed cost-method investment of $725 million on Flipkart's account
  • In 2016, eBay sold a portion of its investment interest in Snapdeal

As a result of its recent deal to get broader in the Indian e-commerce space, eBay has received a 5.44 percent ownership interest in Flipkart. The latest filing with the US Securities and Exchange (SEC) shows that Flipkart's merger with eBay India, which was completed in early August, has brought a gain of $167 million (approximately Rs. 1,083 crores) for eBay.

eBay made a cash investment of $500 million (roughly Rs. 3,242 crores) alongside selling its Indian business arm, eBay.in, to Flipkart. Both developments resulted in a cost-method investment of $725 million (approximately Rs. 4,703 croes) for eBay, as highlighted in the company's quarterly report.

In April, Flipkart raised $1.4 billion (approximately Rs. 9,076 crores) in a funding round led by eBay, Tencent, and Microsoft. The investment opened the doors for eBay to introduce its Indian subsidiary to its new owners.

It appears that Flipkart was not the only Indian company that eBay had found to participate in the growing e-commerce section in India. The San Jose, California-headquartered company even invested an undisclosed amount of investment in Snapdeal, a part of which it sold in 2016. "During the second quarter of 2016, we sold a portion of our equity interest in Jasper Infotech Private Limited (Snapdeal)," the filing mentioned.

The ownership stake of eBay would help Flipkart go global in the coming future. The company already launched its global programme to start exporting its products on eBay and connect with its over 100,000 sellers spreading across 171 million.

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Jagmeet Singh writes about consumer technology for Gadgets 360, out of New Delhi. Jagmeet is a senior reporter for Gadgets 360, and has frequently written about apps, computer security, Internet services, and telecom developments. Jagmeet is available on Twitter at @JagmeetS13 or Email at jagmeets@ndtv.com. Please send in your leads and tips. More
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