India’s largest e-commerce player Flipkart is said to be in talks with its arch rival Myntra for a merger. The common investors of these e-commerce players are apparently pushing for it.

The two common investors for Flipkart and Myntra include Tiger Global and Accel Partners. Both of them hold significant stakes in the two e-commerce companies.

On the other hand, Myntra's co-founder Mukesh Bansal, with 8 per cent share and smaller investors like IDG Ventures and Kalaari Capital with 28 per cent share, would prefer raising a fresh round of funds instead of selling the company. Myntra is as of now in the final stages of sealing the funding of Rs. $50-million or Rs 300-crore from PremjiInvest.

This offer made by Flipkart will be an acquisition if it happens, however Myntra will function as a separate unit with the current management running the business with synergy benefits of controlling the domestic online fashion ecosystem.

A source told The Times of India, "It's still undecided. We are talking, and hoping to address the concerns of everyone. PremjiInvest-led consortium is also in final stages of discussions.”

Tiger Global and Accel Partners together hold 53 per cent shares in Myntra and 40 per cent shares in Flipkart. The two investors are pushing for the proposal citing Myntra's valuation remained flat, at round $130 million, in the latest fundraise.

Coming together of these two e-commerce players would mean the creation of an absolute leader in the Indian e-commerce market. It would also mean that Tiger Global and Accel Partners will no longer have to fund two non-profitable e-commerce companies.

If this deal materializes, it will not only give the Indian e-commerce market a clear leader, but will also add to the funding problems for smaller players like Jabong, Yebhi etc. at a time when e-commerce companies are in dire need of funds.