Snapping the deal

I am writing this column in the middle of August on a very rainy day before the Independence Day. Some interesting things have happened on the e-commerce front over the last few weeks. The merger talks of Snapdeal and Flipkart have failed. Media reports suggest that Snapdeal is likely to fire more than 80 per cent of its remaining employees in an effort to continue operating. Further, after the merger idea between Snapdeal and Flipkart did not go anywhere, Flipkart received an investment of $2.4 billion from the Japanese technology and telecom giant SoftBank. A report in The Economic Times says that Flipkart is the world's third most funded private company. Up until now, it has raised a total capital of around $7 billion. The only two companies that are ahead of Flipkart are the Chinese Didi Chuxing and the American Uber, which have raised $15 billion and $12.9 billion, respectively. Both Didi Chuxing and Uber are taxi cab aggregators. The question is what has Flipkart done with the close to $4.6 billion ($7 billion minus $2.4 billion raised recently) that it had managed to raise up until now before its latest round of fund raising. In a conventional business, companies raise money in order to build assets. Flipkart is basically a market place on the internet and is a very asset-

This article was originally published on October 21, 2017.