Seems like the three major e-commerce companies – Flipkart, Snapdeal and Amazon are doing every possible thing to stay on the top. Earlier it was about the ‘sale day’ spree with offers and discounts and now the companies are into acquisition spree.
New Delhi based Jasper Infotech which runs online market place Snapdeal.com, has been the quickest to make moves among the three, announcing three acquisitions in the past twelve months. Another two or three more acquisitions can be expected to be announced in the coming year.
“We are a technology company and technology remains our focus. Anything that adds to it will be something we’re interested in,” said Abhishek Kumar, head, corporate development for Snapdeal, who is responsible for leading the company’s M&A initiatives. But Kumar denied to mention the spending potential for acquisition. However, its believed the compant has allocated up to 60% of its total spend on technology.
Aside from acquiring premium fashion portal last month, Snapdeal raised $627 million from Japanese media, internet and telecom investor SoftBank last year.
Flush with risk-capital funding, India’s e-commerce ventures are actively scouting for deals, especially in the areas of mobile, analytics, payments, logistics and product categories
While Bengaluru-based Flipkart got on board Nishant Verman, formerly with VC firm Canaan Partners, to lead its M&A operations; Amazon, the world’s largest online retailer, hired Bessemer Venture Partners’ Abhijeet Mazumdar to spearhead its private investments and acquisitions strategy in India and South East Asia.
Flipkart, which raised $1.9 billion through fndraising in 2014, is believed to be actively in talks to acquire ventures operating in the mobile space. While the acquisition is not out officially, media suggests that it is in talks to buy a large stake in mobile advertising firm AdIquity. Last september, it made a strategic investment in mobile payments company Ngpay.
The founder and the managing director of investment bank Langham Capital has quoted that the next years are likely to be very interesting as M&A will increasingly be central part of their (e-commerce companies) strategy for expansion. A Company spokes person said that in the growing market, M&A are very important and also they are open to take up any good opportunities that come their way.
In last December, Amazon, which entered Indian market in 2013, picked up a minority stake in gifting card technology venture QwikCilver, a transaction first reported by ET. Amazon denied to comment on the statement.
“The stakes have been upped. The market is at an early stage, and therefore, there are more opportunities to consolidate. Ultimately, e-commerce is about the entire eco-system and not just about the consumers,” said Vijay Shekhar Sharma, founder and MD of Paytm.
Both Flipkart and Snapdeal are also in the midst of boosing up their M&A teams. While Flipkart has already taken in former Goldman Sachs and Peepul Capital alumni Vinay Subramanian and Akshay Bhushan, co-founder of WhaleLogix; Snapdeal has hired Unilazer Ventures’ Ankit Shah.