$200 m infusion into Flipkart raises hope afresh for e-commerce

E-commerce major Flipkart has raised $200 million (around Rs 1,193 crore) from its existing investors such as Naspers, Accel and Tiger Global.

The deal is said to be the single largest round of funding for an Indian e-commerce company. It also marks the fifth round of funding for the Bangalore-based company, and comes at a time when doubts abound about the future of the e-commerce industry in the country.

The deal is expected to help Flipkart cement its position as the leader of a hyper-competitive market where it claims 96 lakh registered users and more than 10 lakh unique visitors per day.

“This deal is a validation of the belief that e-commerce as well as Flipkart are here to stay. There have been questions raised on the way we function as an organisation. A deal like this should put an end to that,” said Sachin Bansal (pictured), co-founder and CEO, Flipkart.

In all, the company has raised about $380 million (around Rs 2,280 crore) from investors so far. The latest round of funding will be used for investments in technology, improvements to house logistics and supply chain, and on automation, people and talent development.

According to a study by Technopak, a retail consulting firm, e-commerce in India, which is pegged at $1billion currently, is set to touch $76 billion by 2021.

“One has to have national level infrastructure and investments once the market size touches $76 billion. Our target is to be a $1 billion company by 2015. We are already half way through it,” said Binny Bansal, co-founder and COO, Flipkart.

E-commerce analysts said the fund infusion is good news for the industry and shows consolidation and maturity in the market.

Flipkart confirmed it wants to go in for an initial public offering in the long run, but refused to discuss any timeframe or size.