Flipkart, India’s largest e-commerce company is in talks to acquire a major stake in MapmyIndia, a digital mapping company which is on a look out for exit. If closed as per the talks, the deal could benefit Flipkart’s logistics and customer analytics.
Reports suggest that Flipkart could acquire the stake of the New Delhi-based company for around $60 million. Some suggests that the deal would cost more than that. A person close to the deal said, “The deal would allow all investors in MapmyIndia to get an exit. The promoters could, however, retain some stake in the firm.”
The details on the exact percent of equity that Flipkart is intending to buy is still vague. The talks of the deal started around a month ago by the two companies and currently seems to be in the final stages. “The deal is being negotiated between the two companies directly and no investment banker has been appointed,” said the same person.
Rakesh Verma, CEO and founder of MapmyIndia denied the news of the acquisition and said it’s a rumor. He said, “The financial investors have around 25% stake and it is correct they are looking at an exit. We are an independent company and will remain independent.” Flipkart denied to comment on the news.
The 23-year old company MapmyIndia has raised more than $30 million in funding till date from various investors like Lightbox Ventures, Nexus Venture Partners and Qualcomm Ventures and a Japanese mapping company Zenrin.
Importance for tracking and mapping systems have grown rapidly in the past few years. It has become an important factor to study the consumer behavior and now that MapmyIndia’s database could prove very helpful for the e-retailer.
A venture capitalist familiar with Flipkart said, “With mapping information one can ensure that deliveries are done more effectively, besides guiding them on how a company can set up a hyper-local distribution and warehouses. It can create a huge competitive advantage to have a system like this which is proprietary.”
An e-commerce company acquiring a mapping service company is not all that new for in 2014, Alibaba has acquired a mapping service company AutoNavi Holdings for $1.5 billion before the company opened up its shares for public.