Flipkart Group Acquires Yaantra for $40 million to Expand its Recommerce Business
According to sources familiar with the situation, the acquisition is estimated to cost between $40 and $50 million in a cash-plus-stock arrangement. Additional prizes will be given to management based on the achievement of certain milestones over a period of time.
Flipkart claims that the acquisition of Yaantra will provide it with more inexpensive reconditioned cellphones.
The sale of previously owned and used goods is known as recommerce or reverse commerce.
Flipkart is one of the most popular online retailers of goods and cellphones.
Customers may now return their old smartphones for a discount on new phones after the company implementes a phone exchange feature.
After a busy year of investments, Kalyan Krishnamurthy, Flipkart group CEO, said in a recent interview that the business will try to consolidate on its bets across hyperlocal, Shopsy, and food in 2022. Over the last 12-18 months, the ecommerce giant is said to have spent $400-500 million on M&As, including the acquisitions of vacation booking site Cleartrip, online pharmacy SastaSundar, and most recently, a $145 million investment alongside Walmart in Ninjacart, a fresh produce supply chain company.
“On the device quality assessment side, we have built a lot of capabilities and it is the backbone for building the refurbished business,” said Jayant Jha, cofounder of Yaantra to ET, on how Yaantra acquisition will help Flipkart. “We have also built a network of 35,000 retailers in tier-2 and tier-3 towns, which are growth drivers.”
Prakash Sikaria, senior vice president and head of Flipkart's growth charter, will oversee the Yaantra team.
“India is one of the fastest-growing markets for electronic goods, with smartphones being one of the most in-demand,” says Sikaria. “There is a large set of consumers who aspire to own branded devices, but prices are sometimes prohibitive. This is where Yaantra fits in perfectly. Their recommerce value chain and refurbishment capability will allow Flipkart to create a very meaningful recommerce offering.”