Flipkart seeks to raise $1.5 bn from Microsoft, others

Moneycontrol BureauIndia’s largest online marketplace, Flipkart, is in plans to increase the size of its funding round and is now seeking to raise up to USD 1.5 billion, including from investors including Microsoft Corp., eBay Inc., PayPal Holdings Inc. and Tencent Holdings Ltd, reports Mint.

The e-commerce giant is valuing itself at USD 10-12 billion, said people privy to the information. This valuation is lower than its previous valuation of USD 15 billion. 

However, there is still fear of the deal not going through if investors do not agree with valuations. Over the past one year, the company has seen a cut in valuations by 60 percent from five of its investors. The company is seeing troubled times and since 2016 many of its investors like Morgan Stanley, Vanguard Group and T. Rowe Price Associates Inc. have marked down its valuation. One of the estimates has lowered the valuation to USD 5.54 billion. Even fund houses are walking away from Flipkart with five funds besides Wal-Mart Stores turning down discussions with the company due to differences over valuation.This year in January, another fund house downgraded Flipkart's valuation. A Fidelity-managed mutual fund brought down the company's value of shares by 36.1 percent, pegging the valuation at USD 5.56 billion. It has marked value of each share at USD 52.13 as of November 2016, from USD 81.55 per share. This coincides with Morgan Stanley's disclosure of bringing down the share value at USD 52.13 in September. 

With new chief Kalyan Krishnamurthy, Flipkart is hoping to backpedal to its glory days and two financial investors or funds have also expressed interest in investing in the company. It is also in talks with Google Capital for the ongoing funding round.