Flipkart picks 34% stake in MapmyIndia

Flipkart, India's most valuable startup, is picking up a little over 34% stake in digital mapping firm MapmyIndia, in a deal that values the Delhi-based mapping company at around $260 million or Rs.1,600 crore.
For Flipkart -which said the deal is expected to give it a competitive edge in terms of supply chain and logistics in a statement on Thursday -this investment is likely to be one of the largest strategic investments made by the Bengaluru company which was estimated to be worth about $15 billion at its last round of funding.
Flipkart is also likely to get two seats on the eight-member board of MapmyIndia, with senior VP for engineering Hari Vasudev and head of consumer experience and growth Surojit Chatterjee expected to join.
While Flipkart will invest up to $5 million in primary capital, it bought a stake of about 32% from MapmyIndia's early investors venture capital funds -Lightbox and Nexus Venture Partners -according to filings with Ministry of Corporate Affairs (MCA). The secondary leg of the transaction happened at a discount to the Rs.1,600 crore valuation.
Flipkart, which is targeting $10 billion in gross merchandise value (GMV) by March 2016, plans to deploy location intelligence capabilities from MapmyIndia across its logistics network to strengthen its first-mile pickup and last mile delivery operations. The Bengaluru-based etailer also plans to leverage MapMyIndia's data for better address verification, real-time shipment tracking, facility mapping and theft minimisation.
Location is becoming increasingly important to understand consumer behaviour and with MapmyIndia's database across big metros and small towns could be an asset to etailers like Flipkart for hyperlocal distribution and warehouses.Flipkart has also made other investments in supply chain related ventures, like self-serve locker provider QikPod and freight booking marketplace Zinka.
But MapmyIndia could be its largest investment till date after acquisition of Myntra. Even in markets like China, players like Alibaba have made a move into the space with acquisition of mapping services company AutoNavi Holdings for $1.5 billion in April 2014 before its public offering on NYSE.
MapmyIndia, founded in 1992 by husband wife duo Rakesh and Rashmi Verma, had raised around $30 million in funding from VCs like Lightbox Ventures, Nexus Venture Partners and Qualcomm Ventures besides Japanese mapping company Zenrin. Both Zenrin and Qualcomm continue to be investors.
MapmyIndia had a topline of Rs.70 crore during last fiscal year, which it expected to double in current financial year and profits increasing by 300%.

No comments: