Flipkart, the poster child of Indian eCommerce, has acquired LetsBuy for $25m. This is a sign of things to come for eCommerce in India as lot of start-ups are looking for a payday. If 2011 was the year of starting up eCommercing sites selling anything from pots to shoes, 2012 would be an year of reflection and consolidation.

The news was broken by Medianama last night. Mainstream media doesn’t have it yet and details are yet to be confirmed.

Not a billion dollars. Not yet

Flipkart has recently raised $150m funding, valuing the company at $850m. With the acquisition of LetsBuy the valuation is now close to $900. Not quite the billion dollars everybody wants it to be.

LetsBuy has occupied the Indian mind space for quite some time. It’s the second site I go to check for prices on the latest gadgets or books. I thought it was a competitor and everybody seems to agree. The page views, one of the measures used to gauge online companies, are quite good too. But that doesn’t explain the $25m valuation of LetsBuy.

Was LetsBuy valued artificially low as it has common investors with Flipkart? Or LetsBuy never really was a competitor with Flipkart, rather a nice little dot which is rising fast?

Amazon effect

Flipkart is one company which seems to be taking its competition very seriously. When the first news of Amazon contemplating an India entry broke last year, Flipkart went into frenzy and added new products to its line-up. With Amazon’s pseudo entry through Junglee.com, Flipkart has upped the ante and bought itself a gift.

With Flipkart’s move, Amazon now has some serious thinking to do. Its marketplace Junglee.com was thought to be a killer move. I am yet to be convinced. With the new combination of Flipkart and Letsbuy, Amazon will have to look out for other players if it wants to play ball.

It’s all in the family

The deal isn’t about Flipkart’s or LetsBuy’s dynamism. The credit goes to the common investors (Tiger Global and Accel Partners) both the companies have. The investors sure have vision.

It’s time to look for all the eCommerce companies, their investors and find synergies. What’s next?

PS: Congratulations to Medianama for breaking one of the biggest stories in Indian Internet space.