 "These are Myntra's demands for a possible merger with Flipkart")
A possible Flipkart-Myntra merger gets more and more realistic with the Economic Times today reporting that negotiations between the two e-tailing giants have entered the final phase.
Sources have told_ET_ that Myntra is aiming for a valuation of Rs 2,400 crore ($400 million) although insiders believes that the number won’t go beyond $370 million, as there is ’no possibility’ of a consensus on the $400 million figure.
In a separate interview with_ ET,_Myntra’s Mukesh Bansal said the brand will focus on technology and mobile developments and needs $100-$150 million of funds over the next three years to achieve the goals. He did not express a preference from where the funds come - either financial or strategic investors.
He was explicit on what he would expect from an investor - “…Full autonomy for the management team is absolutely required. We also need a commitment to build our private brands portfolio.”
Bansal also clarified that Myntra has not come under any investor pressure to pursue a Flipkart alliance, as has been often reported in the media.
In an earlier article, while tipping a hat to Flipkart’s logistical strengths, Bansal alluded to consolidation probably being the best bet to win big in India’s e-commerce market. He, however, did not explicitly name Flipkart.
Today, Bansal was more vocal with his praise for Flipkart. “Flipkart is leaps and bounds ahead of other players trying to come into marketplace…What I like about their management team is the long term commitment and willingness to take big and bold bets and go against the grain,“he told_ET._
A Flipkart-Myntra merger will result in a far more bulked up rival against the likes of eBay and Amazon, who are looking to establish strong footholds in India. It would also blow domestic rivals like Snapdeal out of the water.
The_ET_quotesAshish Jhalani, head of advisory firm eTailing India, who said that the merger must go through so that a formidable domestic player can compete with international competitors like Amazon and eBay.
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