To have a competitive advantage over its rival Amazon India, home-grown e-tailer Flipkart is planning to acquire artificial intelligence (AI) startup.
The company is looking for startups in Silicon Valley to bring in differentiation in its focus area, which is AI and ML technology, said an ET report citing anonymous sources. E-tailer plans to apply AI in a wide range of areas both on the consumer-facing side and on its supply side. Flipkart is ready to shell out $25 million.
Compare to its rivals like Amazon, which is known for its strong technology, Flipkart has a lot of catching to do. Since last year, Flipkart has witnessed a series of technology executive exits in Ashish Gupta, VP, engineering and Ashish Vikram among many other. It also had to reshuffle in the engineering team. Its catalogue management system was out of order, added the source. Two years ago, Flipkart had acquired the F7 Labs in the Silicon Valley to focus on areas such as AI and machine learning.
Flipkart is now focusing heavily on solving key problems in Indian e-commerce and thinking about next 5-10 years to shape the Indian market.
Flipkart co-founder and chairman Sachin Bansal in an earlier interview to Mint had said the e-commerce firm will invest hundreds of millions of dollars in the AI initiative over the next few years in India and US. It also reportedly carved out an internal unit called AIforIndia.
Flipkart chief executive officer Kalyan Krishnamurthy too had emphasised that the e-tailer will invest disproportionately in technology. The company will see technology, data science and AI (artificial intelligence) driving all aspects of our business and P&L (profit and loss), including customers and categories, including cost structures.
However, Flipkart has officially not responded on the matter.
Of late, the Bengaluru-based e-tailer has been focusing on boosting market share rather than narrowing its losses. For the financial year ending March 2017, Flipkart widened its losses by 68 percent to Rs 8,771 crore. Flipkart had posted losses of Rs 5,223 crore in 2015-16.
SoftBank-backed firm invested $257 million in its logistics arm eKart, after pumping in $147 million into the unit in last September. Both Flipkart and Amazon India are jostling for market leadership.
On Monday, Amazon India introduced Unified Payment Interface (UPI) as a payment method on its mobile apps.