Flipkart raises $1 billion funding, largest in Indian e-commerce space

Sachin Bansal (right) and Binny Bansal, founders of Flipkart, speak at a press conference in Bangalore on Tuesday. Flipkart has raised $1 billion (over Rs 6,000 crore) in fresh funding from a group of investors, the largest so far in the Indian e-commerce industry. PHOTO G R N SOMASHEKAR   | Photo Credit: SOMASHEKAR G R N

India’s leading e-commerce retailer Flipkart announced on Tuesday that it has raised funds worth $1 billion (over Rs.6,000 crore), the largest-ever by an Indian Internet company.

In a tightly competitive market, Flipkart has been going aggressive on fund-raising, just having raised $210 million as recently as May this year. The year 2014 is punctuated with milestones for the Bangalore-based e-tailer which crossed $1 billion in gross merchandise value in March and then went on to acquire competitor in one of the biggest deals in the sector.

The current funding round, the seventh till date, is led by existing investors Tiger Global and Naspers, with GIC, Singapore’s sovereign wealth fund, participating for the first time. Analyst sources speculate that with this the company is valuated between $6 billion and $7 billion.

Co-founder Sachin Bansal, who described the deal inked last week as a milestone for the Indian Internet as a whole, said that the company hoped to become one of India’s first $100 billion company. He said that the company wanted to get there in the next five years or more; a task that was “very tough” but one that he felt confident of aiming for given the current level of funding.

When asked about going public, Mr. Bansal’s reply was emphatic. “We are at a stage where we are not thinking of an IPO at all,” he said, saying that it was a consideration for later, when the company’s business model would be more stable.

Going ahead, co-founder Binny Bansal said the company would look at acquisitions and in deepening existing investments. Mobile commerce, payments and improving customer and seller experience would be key focus areas, he said.

China v India

Both Bansals said that they believed the Indian Internet was at an “inflection point”, with Internet speeds on the increase, more users coming on board and mobile traffic moving upwards.

The comparison with China, inevitable as it is, shows the Indian e-commerce story up as a laggard by at least nine years. Alibaba, the first Chinese Internet company to raise $1 billion from Yahoo Inc, did so in 2005. Mr. Bansal conceded that “We are now where China was back then.” “Prior to 2005, in China, there weren’t many e-commerce companies. That was their inflexion point, backed by investors who believed that China’s Internet business held potential. India is at that point today,” he said.

The site has four million visits every day and 22 million registered users.

PTI adds:

It is estimated that the firm has, so far, raised over $1.7 billion from investors, including the current transaction.

The Bangalore-based firm, founded by Sachin Bansal and Binny Bansal, counts Accel Partners, Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina and Vulcan Capital among its other investors.

The home-grown e-retailer had >acquired online fashion retailer Myntra in May in what is estimated to be a Rs 2,000 crore deal.

It had also announced >an investment of $100 million (around Rs 600 crore) in its fashion business over the next 12-18 months.

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Printable version | Oct 24, 2021 12:57:57 AM |

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