MUMBAI: In a big consolidation move for the burgeoning Indian e-commerce market, the poster boy of Indian online retail - Flipkart.com - has bought out electronics retailer Letsbuy.com for an estimated $25 million. Both sites are backed by common investors - Tiger Global Management and Accel Partners. Although no details were made available by the company or the investors about the deal value and the structure of the transaction, TOI has learnt that Letsbuy.com had been on the block for a while and was looking for a valuation of about $80-85 million but had to finally resort to a distress sale after finding no takers at that price.
People familiar with the situation said the online portal, which was founded in 2009 by Hitesh Dhingra and Amanpreet Bajaj, was in desperate need of funding but could not muster it from the existing investors. When asked about investors wanting to push for this consolidation, Sachin Bansal, CEO & co-founder, Flipkart.com, told this paper, "We will not be doing anything which is not in line with our long-term business goals. All investors have been supportive as they see value creation for both companies. Helion, the lead investor at Letsbuy, also believes that the combined strength of the two leading players is formidable. While we do not have a set budget for acquisitions, if the time and price is right (as was the case with this deal) we will be open to more such opportunities." Bangalore-based online retailer Flipkart, which started off as an online book seller but now has a diversified product line, has been eyeing a $1-billion valuation.
TOI has also learnt that another online start-up, Exclusively.in, backed by the same investors (Accel, Tiger and Helion), has sacked several employees and is up for sale. The founders of the fashion flash sales site are now focusing their resources on their private label portal, SherSingh.com. "Currently we are running Exclusively.in but we are focusing on our private label business which requires less human capital," said Sunjay Guleria, CEO & co-founder, Exclusively.in and SherSingh.com, which has raised $19million so far.