India’s booming online economy is attracting interest from tech companies the world over.

Two of the biggest names that are working to establish a foothold in the country are Microsoft Corp. and eBay Inc., which today banded together to lead a $1.4 billion funding round into e-commerce powerhouse Flipkart Ltd. They were joined by China’s Tencent Holdings Ltd. The Shenzhen-based company is a major force in the Asian web ecosystem, making headlines last month by acquiring a 5 percent stake in Tesla Inc. for $1.78 billion.

Flipkart divulged in a statement this morning that the investment brings its valuation to $11.6 billion. Furthermore, the deal is set to see the startup acquire eBay India in a buyout that local business newspaper Livemint claims is valued between $200 million and $250 million.

That’s not to say that the online auction giant is leaving the local e-commerce market. Quite the opposite, in fact. Flipkart and eBay have also inked an “exclusive cross-border trade agreement” as part of the investment that’s aimed at enabling merchants that rely on their respective platforms to purchase goods from one another more easily.

The other two contributors to today’s round likewise have strategic considerations in mind. One of Tencent’s motivations for supporting Flipkart was likely to tilt the balance against Alibaba Group Holding Ltd., its top competitor in China, which is actively targeting the Indian market. The company recently spent $177 million on a controlling stake in a fast-rising local player called Paytm Ecommerce Pvt Ltd.

Microsoft’s decision to back Flipkart, meanwhile, probably had something to do with the fact that rival Amazon.com Inc. is aggressively working to expand its presence in India. Amazon has allocated more than $5 billion in recent years to growing local e-commerce operations and building more cloud data centers. Microsoft is likewise going after India’s infrastructure-as-a-service market.

In a boost for its efforts, the software giant recently struck an exclusive cloud deal with Flipkart that may be related to today’s investment. Microsoft didn’t share any numbers, but the price tag is probably significant if the infrastructure spending of other fast-growing web giants is anything to go by. Ahead of its public offering earlier this year, Snap Inc. disclosed cloud contracts with Google Inc. and Amazon worth a combined $3 billion.

Image: Flipkart