Flipkart and Amazon may be arch rivals in India but the two e-commerce companies now have a common investor backing them. Tiger Global Management LCC, which is among the largest stakeholder in the Indian online retail company, has picked up shares of Amazon through the stock exchange.
In a filing with the US’ capital market regulator Securities and Exchange Commission (SEC), Tiger Global said that it has increased its stake in global e-commerce giant Amazon.com Inc by acquiring 2.44 million shares. With this, Tiger Global now holds 3.17 million shares worth over $16.3 billion in the Nasdaq-listed company.
Tiger Global along with a few other investors have pumped in around $1.7 billion in Sachin and Binny Bansal-founded Flipkart. The hedge fund also has stake in Chinese e-commerce major, Alibaba Group Holdings.
Common investor While the investment pattern is interesting given that the target companies compete with each, analysts feel that having common investors is not unusual in the e-commerce industry.
Ashish Jhalani, an expert on e-commerce and founder of e-Tailing India, said that, “Tiger Global’s investment in Amazon does not change much of the equation in the industry. They (Tiger) are just hedging their bets, which are not abnormal for funds.” There are other such examples where investment funds have invested in rival companies. For example, Alibaba Group has invested in both mobile commerce and payments firm Paytm and its Snapdeal.
Clearly, investors are spreading their risks because on one hand India’s e-commerce industry is likely to clock a compounded annual growth rate (CAGR) of 35 per cent and cross the $100-billion mark over the next five years, there are also huge risks.