India’s largest online retailer Flipkart is set to get between $1.2 billion and $1.5 billion in fresh capital from Tencent Holdings Ltd, Microsoft Corp. and eBay Inc.—funding that will provide it ammunition in the high-stakes battle with Amazon India for dominance of India’s e-commerce market.

Flipkart will get a pre-money valuation of $10 billion in this round, which is expected to close next week, three people familiar with the matter said on condition of anonymity. When closed, this will be the largest ever fundraising by an Indian start-up. Pre-money valuation refers to the worth of the company excluding the cash in the current round.

Separately, Flipkart is also continuing negotiations with Japan’s SoftBank Group Corp. to buy the latter’s portfolio company Snapdeal (Jasper Infotech Pvt. Ltd), the people said. Flipkart has also discussed buying eBay’s India operations, though that deal may not be sealed within the next week, the people said.

Also read | Softbank reworking sale plan of Snapdeal, decision in few weeks: report

While Flipkart is expected to receive up to $1.5 billion immediately, the round may be kept open to make room for more investors, one of the people cited above said. For instance, if Flipkart ends up acquiring Snapdeal, SoftBank will invest more cash in Flipkart, the person said.

In the event of a buyout of Snapdeal, Flipkart’s largest investor Tiger Global Management may sell some of its shares to SoftBank, the person said. Tiger Global, which has pumped about $1 billion into Flipkart over the past eight years, currently holds about 30-33% in the online retailer.

The Times of India newspaper first reported the possibility of Tiger Global selling part of its stake to SoftBank.

Mint reported on 23 February that Flipkart was in talks to raise up to $1.5 billion from investors including Microsoft, eBay, PayPal Holdings Inc. and Tencent Holdings at a valuation of $10-12 billion. Mint learns that PayPal has dropped out of the latest funding talks.

Microsoft, Tencent and eBay spokespersons did not immediately respond to emails seeking comment. Flipkart also didn’t respond to an email seeking comment.

Mint also reported on 22 March that Snapdeal, which has been struggling to raise fresh funds, is in preliminary talks with Paytm E-Commerce Pvt. Ltd and Flipkart for a potential sale. Both SoftBank and Flipkart are keen on a deal, the first because it would end up with a stake in a company that can take the fight to Amazon’s Indian arm and the second because it needs the money.

Flipkart last raised funds in the middle of 2015, when it received $700 million from existing investors at a valuation of $15 billion. While its valuation has reduced significantly, the mammoth fundraising is still being seen a coup for a company that has been hammered by valuation markdowns by its own investors last year. Flipkart has changed its CEO twice in the past 15 months and is now managed by Kalyan Krishnamurthy, a representative of Tiger Global.

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