Investors give Flipkart, Indian e-tail a thumbs up
The funds will allow Flipkart to do some strategic things. (photo: DC/File)
Bengaluru: Flipkart, India’s largest online retailer, on Tuesday said it had raised a whopping billion dollars in fresh funding from a group of new and existing investors, as its struggle for dominance of the rapidly growing Indian e-commerce market against global giants Amazon.com and eBay intensifies.
The seven-year old company’s founders Sachin Bansal and Binny Bansal said the big money, coming close on the heels of the $210 million it raised from Russian billionaire Yuri Milner’s DST Global in May and the subsequent acquisition of fellow Indian e-tailer Myntra.com, showed investor confidence in the Indian e-commerce story as well as Flipkart itself, now said to be valued close to $7 billion.
“E-commerce in India is scaling up much faster (than expected). The future of commerce in India is online”, they said. They expect to spend the money expanding Flipkart’s logistics network into small towns, improving the online payments and seller ecosystems, and adding new lines of business.
“The funds will allow us to do these strategic things. We also continue to look for acquisitions. There is a lot happening on the technology side, in wearables, fashion technology, robotics, etc, and we are looking to invest in these”, said CEO Sachin Bansal.
He also plans to hire a thousand engineers, including from Silicon Valley as the company builds up mobile and associated technologies.
“We are looking to get people from the Valley. Earlier Indian internet companies were not big enough to be able to attract talent from Silicon Valley. A lot of Indians there want to come back”, Mr Sachin said.
Flipkart currently has over 22 million registered users. “We will probably be profitable when we get to a 100 million users and are delivering to one in three Indian homes. That is in the long term. It may be three years, it may be eight”, he said.
As a result of the big round of funding, Flipkart, which was earlier talking of going public in 2015, has put off those plans. “The IPO is not in consideration at all now, although we will go public in the long term,” Sachin said.
This round of investment, led by existing investors Tiger Global Management and Naspers, saw Singapore’s sovereign wealth fund GIC coming on board.
Other investors in Flipkart, which has raised some $1.7 billion (including current transaction) so far as it burns cash to scale up and wide and pump up revenues, include Accel Partners, ICONIQ Capital, Sofina and Morgan Stanley Investment Management.
( Source : dc correspondent )
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