BANGALORE: Leading Indian e-commerce players, Flipkart and Myntra are in talks about a deal, which may take shape of a financial merger or the acquisition of Myntra by Flipkart.
The two companies have three investors in common-Accel Partners, Tiger Global and Sofina. Accel Partners and Tiger Global are keen on a merger, whereas the founders of Myntra are not eager for a complete sell out as the Myntra is performing well on its own and has emerged as the leader in online fashion retail. In February when Myntra was out to raise funds, it preferred a second round of funding by Premji Invest over a merger with Flipkart.
The talk of merger came up as Amazon is steadily gaining ground in the Indian market after a late entry and is all set to launch its apparel line. The merger of the two companies will reduce the pressure of the market competition.
A deal between the two companies may take the form of the Flipkart and Letsbuy deal of 2012, where Flipkart bought the online electronics retailer, following which Letsbuy ceased to exist. The other way might be a financial merger like the Zappos- Amazon deal, where Zappos functions as an independent entity after the acquisition by Amazon.
Flipkart has raised $560 million and has set a target of $1billion sales this fiscal. Myntra has raised $125 million so far.
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