Flipkart has declined the rumors that it is in talks with Alibaba or any other investor over stake sale.
The officials at Flipkart have come forward to declare that the biggest Indian e-commerce startup is not in negotiations with the Chinese e-commerce giant, Alibaba Group Holding, or any other investor for a possible stake sale. There were speculations that started at the beginning of this year when Alibaba began to expand its global footprints in the international regions, such as India. The online retailer currently holds stake in two e-commerce startups in the region, which include Snapdeal and PayTM.
Alibaba Group already made it clear before it had plans to invest in Flipkart that it will only do if the startup lowers its valuation to decrease share price. Various sources suggested that both parties initiated the talks for a stake sale earlier this year. According to the statement of Flipkart, it might be possible that the negotiations have ended due to the disagreements on the valuation and price. The Chinese e-commerce leader wanted to have a mutual agreement with Flipkart over this but it seems like the Indian startup is not willing to lower the valuation.
The spokesperson of Alibaba was approached for a comment but he refused to provide any comment on such market speculation. On the other hand, Flipkart spokesperson said in a statement, “We are not in talks with anyone to raise funds. We are well capitalized for the long term. We believe in raising funds when they are available and always at the right valuation.”
According to sources, Alibaba Group might have lost interest in investing in Flipkart due to disagreements over valuation terms. It wanted to buy stakes in the firm at a price of last year’s valuation. Morgan Stanley, a US based funding house, is a well-known investor in the Indian company. Morgan Stanley recently decreased Flipkart valuation from $15 billion to $11 billion as the e-commerce startup failed to meet the earnings and revenues expectations for last year.
Flipkart last received a massive funding of $700 million from Qatar Investment Authority, Tiger Global Management, and other investors last ear. It was in talks with Alibaba and other reputed investors since late last year to raise up to $1 billion in funding.
The Chinese e-commerce leader is known in India for investing in Indian company’s rivals, Snapdeal and PayTM. It is making deals and acquisitions in the area in order to increase its India exposure and improve its international market presence. Alibaba said that it will not expand its operations or business in the foreign regions until it makes name internationally.
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