Flipkart in talks to acquire stake in MapmyIndia
The sources said that Flipkart could shell out around $60 million or Rs 400 crore for a majority stake in the New Delhi-based company.
The sources said that Flipkart could shell out around $60 million or Rs 400 crore for a majority stake in the New Delhi-based company. However, another person close to the development insisted that the deal size could be around Rs 500 crore. “The deal would allow all investors in MapmyIndia to get an exit. The promoters could, however, retain some stake in the firm,” said the person close to the development.
ET could not independently confirm the exact percentage of equity that Flipkart is likely to pick up in MapmyIndia. The deal negotiations were initiated about a month back directly between two companies. “The deal is being negotiated between the two companies directly and no investment banker has been appointed,” the people quoted earlier added. When contacted by ET, Mapmy-India founder & CEO Rakesh Verma denied any plans for a sale of the company. “The financial investors have around 25% stake and it is correct they are looking at an exit. We are an independent company and will remain independent,” said Verma.
In an email response to a questionnaire sent by ET, Flipkart said, “We won’t be able to comment on this.” Owned by CE Info Systems, MapmyIndia has raised around $30 million in funding from venture capital investors like Lightbox Ventures, Nexus Venture Partners and Qualcomm Ventures besides Japanese mapping company Zenrin. The firm was founded in 1992 by husband wife duo Rakesh Verma and Rashmi Verma. According to a PTI report in April this year, the company had claimed that it had an order book of Rs 200 crore for this fiscal and a large chunk of its revenues comes from automakers, besides other enterprises and government users.
Industry trackers believe that 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 e-tailers.
“With mapping information one can ensure that deliveries are done more effectively, besides guiding them on how a company can set up a hyper-local distribution and warehouses,” said a VC investor who knows the firm. “It can create a huge competitive advantage to have a system like this which is proprietary,” the person added. said a venture capital investor who knows the company. Even in markets like China, players, including Alibaba, have forayed into the space with acquisition of mapping services company AutoNavi Holdings for $1.5 billion in April 2014 before its public offering on NYSE.