Deal is done. India's largest online fashion store, Myntra has been acquired by Flipkart.com, India's largest ecommerce player.
Though both the parties have declined to comment on the deal structure, but the happy faces during the announcement ensured that it's a win-win situation for both Myntra and Flipkart.
Sachin accepted that the conversation was initiated by him and over the months they became more and more confident that this is the way to go. The deal doesn't affect things for the consumer as he will continue to see Myntra and Flipkart fashion store as separate entities. But what happens to employees, and what about the founder himself? Why the acquisition at this stage and what can be expected in coming times?
Here's a quick fact file of the Myntra-Flipkart deal:
- It's a 100% acquisition. The current investors in Myntra remain so and there's no exit taking place.
- Myntra continues to function as an independent entity and so does the fashion division of Flipkart.
- Only Mukesh Bansal from Myntra joins the Flipkart board. He'll head the fashion business for Flipkart.
- All the Myntra employees get the universal stock options.
- $100 million to be invested in Flipkart fashion business in coming years.
- Together, Flipkart and Myntra will have over 50% share in the online fashion market in India (Myntra's current share is ~30%).
- There are no immediate plans of integrating the duo but the possibilities will be explored in near future.
- There are enough funds with Flipkart to sustain for long, hence there are no immediate plans for next round of funding.
- Flipkart is definitely eyeing for an IPO but not the priority as of now.
- Flipkart plans to go Alibaba way rather than the Amazon way due to more similarities in between Indian and Chinese consumers.
- There's no threat to Myntra's online fashion dominance by Amazon.
- Flipkart aims to grow its fashion/apparel business to an extent that it accounts to 30% of their revenue shares.
- Key stakeholders in Myntra have become millionaires with this deal.
- Myntra continues to hire and expand. Have global ambitions as well.
Watch out this space for more details on the Flipkart-Myntra deal.