The pair share two investors, Tiger Global Management and Accel Partners.
Flipkart will be acquiring 100% of Myntra, and plans to invest $100 million in further developing the fashion business as it seeks to scale up faster to compete with Amazon which has been making moves to aggressively scale its business in the region. Its a battle of the ecommerce behemoths.
“Going forward we have big plans in this segment,” said Sachin Bansal, co-founder of Bangalore-based Flipkart, according to a report in NDTV.
Post-acquisition Myntra’s CEO, Mukesh Bansal, will continue to head up the fashion site — which will remain operating as a independent entity from Flipkart — but will also now be head of the fashion business for Flipkart, and also joins the board. The acquisition is couched as a “partnership” in the joint press release.
Flipkart has some 18 million registered users, and 3.5 million daily visitors to its site. While Myntra has more than 50 million monthly uniques.
We reported the pair were in talks back in April. At the time our sources said the deal valued Myntra at around $330 million. The exact financial terms are not being disclosed today but NDTV cites a source saying the transaction is worth close to $300 million.
Flipkart buying Myntra is a way for it to defend itself agains the rise of other ecommerce giants in the region — as well as Amazon there is also Snapdeal, which just yesterday raised another $100 million, bringing its total raised to more than $400 million. It also recently acquired fashion products discovery site Doozton.
As we noted in the Snapdeal story, India’s e-commerce market is projected to grow 7x to $22 billion in the next five years, as Internet infrastructure continues to improve — enabling more of the country’s massive population to tap into online retail.