Riding high on recently raised fund, India’s leading e-tailer flipkart.com has acquired letsbuy.com, a leading online store primarily deals in electronic, computers and mobile phones. Flipkart has confirmed the report of acquisition in an official statement of the company via an email to iamwire.com.
Speaking about the acquisition, Flipkart’s co-founder and CEO Sachin Bansal said, “This acquisition fits into our strategy of building dominant shares in all categories we operate in. We are already leaders in the books and media verticals. Given that we managed to build a leadership position in consumer electronics as well since its launch in early 2011, it made sense for us to consolidate when we saw this opportunity. This acquisition opportunity came at a very attractive price for us and the timing has also been ideal. The synergies will now allow us to accelerate faster and get to a share similar to what we enjoy in the online books category”.
The acquisition is a combination of cash and equity. The founders of Letsbuy along with their 350+ team will continue to function independently, with the added advantage of now being able to access Flipkart’s superior technology platform and supply chain capabilities.
According to a report published in VCCircle last year, Letsbuy was in final stage to raise around $ 40 million from unknown consortium of investors including Sequoia Capital and Matrix Partners; however, since then it has never been confirmed by letsbuy.com. Earlier, in January last year, letsbuy had raised $ 6 million from Helion Venture, Tiger Global and Accel Partners.
Commenting on the deal Letsbuy Founder & CEO Hitesh Dhingra said that letsbuy.com has experienced a phenomenal growth in the last one year and holds a dominant position in e-commerce industry in India. We believe that our expertise in 3Cs categories matched with Flipkart’s superior technology and supply chain could be a killer combination. The Company had a choice to raise a large round of funding as well, however aligning our business with the largest player in the market made sense as the resultant synergies will guarantee our customers the best possible service, price and selection.
Almost a week back, iamwire reported about Flipkart has raised $ 150 million from Accel Partners and Tiger Global at valuation of $ 850 million.
In our view it is a good move for Flipkart to cement its claim to be one of the top e-tailer of the country. Letsbuy is amongst top 3 e-tailers in the country and perceived as one of the competitor of Flipkart. Amazon has already made its debut in India as junglee.com and after this acquisition of Letsbuy, Flipkart will be in better position to maintain its top slot.