Flipkart buys LetsBuy

From few days there was a news that flipkart will be buying letsbuy and today Flipkart has officially confirmed the acquisition of Letsbuy and added that it is a combination of cash and equity. Flipkart co-Founder & CEO Sachin Bansal said that the acquisition opportunity came at a very attractive price. The exact amount of the deal has not been disclosed.

In a press statement, Flipkart said that the deal will allow for a faster rate of expansion for both companies – giving the combined entity a much larger share in the consumer electronics market.

Even after acquisition the founders of Letsbuy with their 350+ member team will continue to function independently, but will be able to access Flipkart’s technology platform and supply chain capabilities. Letsbuy founder & CEO, Hitesh Dhingra said that the Company had a choice to raise a large round of funding as well, however aligning its business with the largest player in the market made sense.

This acquisition would mark the beginning of a consolidation in the e-commerce space in India, which we have heard is struggling for consumer loyalty. To scale, e-commerce businesses would require substantive funds over the next couple of years, and not all companies may be able to raise that kind of funding. It’s going to be a last-man-standing game, and competition will increase particularly with the entry of Amazon.com in India.