New Delhi: In what is the biggest consolidation in India's e-commerce sector, homegrown e-retailer Flipkart is buying Bangalore-based online fashion store Myntra.
"It's a 100 percent acquisition and going forward we have big plans in this segment," said Sachin Bansal, co-founder of Bangalore-based Flipkart. Flipkart said it would invest $100 million in the fashion business.
Financial details of the deal were not disclosed but a source in the company said the transaction was valued at close to $300 million.
Myntra co-founder and CEO Mukesh Bansal will be joining Flipkart board and will be heading the fashion business at Flipkart. Bansal said that there will be no change in roles post acquisition. Both Flipkart and Myntra will continue to work separately.
The deal gives Flipkart a stronger hold in the fast-growing online fashion business in India.
India's e-commerce market has seen huge growth in the past few years as more people log on to the Internet to shop. While apparel and electronics are bestsellers for most e-commerce firms, categories such as home decor and household items are also popular.
The industry, estimated to be worth about USD 3 billion currently, has firms such as Snapdeal, eBay and Amazon, which follow the marketplace model.
Flipkart started in 2007 as an online bookstore and now sells products across categories, including fashion and electronics. It now also sells white goods and furniture.
Led by increasing Internet penetration and youngsters shopping online, Flipkart's annualised sales crossed $1 billion (over Rs 6,100 crore) a year ahead of target.
The company planned to reach the billion dollar mark for gross merchandise value by 2015.
It also operates under the marketplace model, which allows retailers to offer products on its platform.
Since its inception, the Bangalore-based firm founded by Sachin Bansal and Binny Bansal has raised over $500 million from investors including Naspers, Tiger Global, Accel Partners, Dragoneer, Morgan Stanley, Sofina and Vulcan Capital.
Last year, it raised $360 million from private equity firms, one of the largest funding deals in the Indian e-commerce space.
Myntra sells products from over 650 brands like Nike, HRX by Hrithik Roshan, Biba and Steve Madden and clocked revenue of about Rs 1,000 crore in the previous financial year.
It aims to double its revenue in this financial year as it expands its seller base and adds products.
Myntra has about 100 sellers on board and plans to increase this number to 1,000 by fiscal end.
(With inputs from agencies)
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