There was a time when Jabong was such a sought-after startup that some were even willing to pay $1.2 billion for it. On July 26, e-commerce major Flipkart acquired Jabong for $70 million — lesser than any of the bids reportedly made for it in the last two years.
This may seem like an unfortunate company-specific event, but it is actually an indicator of what lies ahead for several startups.
SEE ALSO: Tiger Global invests big on India’s online fashion retail space
Jabong is not the only Indian e-commerce company to be devalued. The country’s largest online retailer, Flipkart, has been devalued by at least six investors since January.
Investors have reduced the value of their holding in the company by between 15% and 40%. Flipkart is now worth less than $10 billion, down from around $15 billion in September 2015. Flipkart’s devaluation put pressure on other Indian e-commerce companies.
Meanwhile, a sectoral consolidation in Indian e-commerce was on. Between April and June 2016, there were eight merger and acquisition (M&A) deals in the sector, according to startup data curator Xeler8.
(Source: Quartz)