Japan’s online shopping mall Rakuten has acquired US based cashback-shopping site operator in an all cash deal for USD 1 billion, per a TechCrunch report. Post acquisition, the company will hold 100 percent of Ebates’ outstanding voting stock.
Based out of San Francisco, Ebates offers cash back at over 2000 stores including Amazon.com, eBay, Target, Staples, and many more. Since it laid its foundation in 1998, the company has acquired 6 companies viz. Extrabux, Pushpins, OneReceipt, BFAds, fatwallet and AnyCoupons.
Since 2005, Rakuten has been seen expanding outside Japan through the mergers and acquisition activities. This year itself, it has made deals such as Viber (acquisition, USD 900 M), Slice (acquisition) and AirAsia (tie up). Earlier, it has acquired companies such as Kobo for USD 250 million in 2012 and Buy.com for USD 250 million in 2010. This clearly indicates towards the aggressive strategy Rakuten is following in order to mark its entry as well as increase its hold in the US market.
“The combination of Rakuten and Ebates is entirely unique and will revolutionize e-commerce. Combined, Rakuten and Ebates will be able to offer our members access to what will undoubtedly be the world’s largest selection of products across the broadest range of categories.” said Rakuten, Inc. founder and CEO Hiroshi Mikitani.
Swati Bhargava, co-founder of India based cash-back site, CashKaro.com, while commenting on the deal said, “Ebates.com is the largest Cashback site in the US. This deal sets a great precedence for Cashback sites globally. CashKaro.com being the largest Cashback site in India should also benefit from such news as it demonstrates recognition of the value we add to the ecommerce ecosystem.”
Ravitej Yadalam, CEO and Founder of another India and US based cashback site, Pennyful.in said, “The announcement of Ebates getting acquired by Rakuten is an extremely positive sign for the cashback industry as a whole. A large player like Rakuten seeing the strategic value that Ebates brings, especially as a competitive advantage over other major players, is a very good indication of the value a cashback company can bring into an ecosystem.”
The company currently competes with rivals such as Amazon, eBay and Alibaba. According to a Wall Street Journal report, winning new shoppers abroad is crucial for Rakuten as around 95% of its e-commerce revenues are earned in Japan, and its dominance at home is under threat from both Amazon and Yahoo Japan.