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Microsoft may be in on next funding round for new strategic partner Flipkart

Just a few days after Flipkart announced a cloud partnership with Microsoft to expand e-commerce in India, it seems that both companies could soon develop much stronger ties. Indeed, India’s leading online retailer is reportedly in talks with Microsoft, eBay, Paypal and Tencent to raise up to $1.5 billion for its latest funding round (via Livemint).

According to people familiar with the matter, the company recently increased the size of its funding round, which could push the company’s valuation to $10-12 billion. Google Capital and two other financial investors could also be interested in the funding round, with discussions expected to be concluded in the next three months.

However, the massive fundraising could ultimately fail if investors can’t agree on the company’s real valuation, explained Livemint:

Since February 2016, Flipkart investors including Morgan Stanley, Vanguard Group and T. Rowe Price Associates Inc. have marked down its valuation. The lowest of these estimates values Flipkart at just $5.54 billion. And at least five funds besides Wal-Mart Stores Inc., the world’s largest retailer, have walked away from discussions with Flipkart because of differences over valuation, the people cited above said.

As e-commerce is currently a $14-15 billion market in India, Flipkart would be a really interesting investment for Microsoft. Since its creation back in 2007, the company raised $3.5 billion and now owns fashion retailers Jabong and Myntra and as well as a payment app called PhonePe. Obviously, the company really needs this new funding round to succeed to purse its development and remain competitive against the increasingly powerful Amazon India.

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Do you think Flipkart would be a good investment for Microsoft?