Post all the rumours (Flipkart to acquire LetsBuy–Here is what really happened with LetsBuy), the acquisition news is confirmed by both the companies.
Here is the official press release:
Flipkart.com, India’s largest e-commerce player in physical products has acquired Letsbuy, the second largest retailer in electronics. With this move, Flipkart has firmly established itself as the leader in the consumer electronic space. This deal will also allow for a faster rate of expansion for both companies – giving the combined entity a much larger share in the consumer electronics market.
The acquisition is a combination of cash and equity. The founders of Letsbuy along with their 350+ team will continue to function independently, with the added advantage of now being able to access Flipkart’s superior technology platform and supply chain capabilities.
Speaking about the acquisition, Flipkart’s co-founder and CEO Sachin Bansal said, “This acquisition fits into our strategy of building dominant shares in all categories we operate in. We are already leaders in the books and media verticals. Given that we managed to build a leadership position in consumer electronics as well since its launch in early 2011, it made sense for us to consolidate when we saw this opportunity. This acquisition opportunity came at a very attractive price for us and the timing has also been ideal. The synergies will now allow us to accelerate faster and get to a share similar to what we enjoy in the online books category”.
Letsbuy.com founder & CEO Hitesh Dhingra said “Letsbuy.com has experienced a phenomenal growth in the last one year and holds a dominant position in e-commerce industry in India. We believe that our expertise in 3Cs* category matched with Flipkart’s superior technology and supply chain could be a killer combination. The Company had a choice to raise a large round of funding as well, however aligning our business with the largest player in the market made sense as the resultant synergies will guarantee our customers the best possible service, price and selection. ”
While the finer details on mutual synergies are being worked out by both teams at present, the move has been welcomed by investors of both firms. Helion, the lead investor in Letsbuy.com has said it believes that the combined strength of the two leading players is formidable and will be able to deliver a stronger value proposition to customers.
* 3C’s – Computers, Communication and Consumer electronics
Our take: Welcome Junglee! You have set the
house jungle on fire.