The Scaling of a Marketplace Unicorn: Sensing, Seizing, and Transforming Acquisition Opportunities
Unicorns use acquisitions to gain dominance, access resources and resolve scaling trigger points, applying sensing, seizing and transforming.
Summary
The authors study Flipkart, the Indian e-commerce platform, through 14 acquisitions between 2010 and 2018, using 225 archival sources and 10 interviews, and map them onto Teece's dynamic capabilities framework of sensing, seizing and transforming. Acquisitions served three purposes: gaining market dominance, accessing strategic resources, and resolving scaling trigger points, namely the shift from retailer to marketplace, the arrival of Amazon in India, and the gap in payments infrastructure that led to PhonePe. Investor networks helped spot targets (six of the 14 targets shared investors with Flipkart), decisions and payments were fast, and acquired brands and teams kept their autonomy after the deals. The authors conclude that unicorns acquire for scale rather than for cost, which sets them apart from established firms that buy for efficiency.
Editor's opinion
A fast-growing platform can use acquisitions as a scaling instrument rather than a cost-saving one: buying to answer a specific inflection point, such as a new rival or a missing capability, and then leaving the acquired teams autonomous. The Flipkart case suggests that winners in hypercompetitive platform markets keep sensing and seizing opportunities quickly, with investors and partners acting as extra eyes.
Key concepts
unicorns · acquisitions · dynamic capabilities · platform markets · scaling