Flipkart asks Myntra to merge
India’s top online shopping stores Flipkart and Myntra are in merger talks, reported The Times of India. The merger deal is propelled by the two larger, common investors of Flipkart and Myntra – Tiger Global and Accel Partners.
Tiger Global, a US hedge fund and Accel Partners, a venture capitalist firm hold a large piece of share in both the e-commerce startups. Both the investors together hold about 53% stake in Myntra and about 40% in Flipkart.
Flipkart has offered Myntra to merge with it. However, the acquisition involves keeping Myntra as a separate unit with the current management running the business with synergy benefits of controlling the domestic online fashion system, stated The Times of India. But Myntra’s co-founder Mukesh Bansal seems to be raising a $50 million fund and is not interested in selling the company at this time. It may take another two weeks for Myntra and its investors to take a final decision.
The merging of the two Indian e-commerce giants will however be of help to the its common investors Tiger Global and Accel Partners. They will be spared from funding two bleeding internet companies. Also the merger of Flipkart and Myntra will be a “game over” for other online shopping stores like Jabong and Snapdeal who too are trying to capture online retail market in India.