The number of deals — across Series A, B and C — at 216 this year is also turning out to be fewer than the 275 reported in 2015. Among the e-tailers that have picked up money early in the year include Snapdeal, BigBasket, CarTrade and ShopClues, who mopped up over $100 million each. In August mobile messaging platform Hike Messenger raised $ 175 million from investors including Tencent Holdings and Foxconn Technologies Group. Existing investors Tiger Global, Bharti Enterprises and SoftBank Group had also participated in the Series D round of funding.
While Amazon Inc has committed it will spend $five billion to build the business in India, Flipkart is reportedly in the market to raise resources; the e-commerce major reported a loss of R2,306 crore in FY2016 on revenues of R1,952 crore. Recently one of its investors, Morgan Stanly Mutual Fund, marked down the value of its holdings in the e-retailer by 38%, valuing the firm at $5.54 billion.
The tighter funding environment has led to consolidation in some e-commerce verticals, especially hyperlocals. Peppertap, for instance shut its grocery delivery business while some other e-tailers were acquired. Among the top deals of 2016 are Myntra’s acquisition of Jabong for $70 million, FirstCry’ s buyout of Mahindra Retail’s BabyOye for $54 million and Titan’s acquisition of CaratLane for $53 million. As many as 11 merger and acquisition (M&A) deals have been struck year so far. Data from Tracxn Technologies shows , more than twice the number of M&A deals transacted in 2015.
Although the number of online shoppers in the country, currently estimated at 30-35 million, is rising, analysts observe that e-tailers are finding it hard to attract customers unless they offer hefty discounts.
Source: The Financial Express