Flipkart, arguably the largest ecommerce giant in India has successfully raised $1 billion (Rs 6000 crore approximately) from a group of investors, the company announced. That would put the total valuation of the company at a whopping $5 billion (Rs 3000 crore). Quite a jump in just around seven years for the company that was set up in 2007 by ex-Amazon employees Sachin and Binny Bansal, who started the company with an investment of Rs 4 lakh.
This is the biggest funding round for an Indian company, and the second in the world to Uber which had raised $1.2 billion earlier this year. According to media reports, the investors include lead investor Tiger Global & Naspers, Singapore government’s sovereign wealth fund GIC and existing investors DST Global, Tiger Global and Accel Partners.
There is no single valuation for how much the ecommerce market in India could be worth with estimates varying for $1.5 billion to $4 billion. But as multiple media interviews would suggest, even big retailers agree that ecommerce are driving up the sales. This could be true even in the smaller cities in the country where some of the big brands might not have set up shop as yet but get to sell their products in.
According to some estimates around one lakh smart phones are being added everyday in India, which will only raise the sales for the online portals.
Flipkart's own revenue also stands at around $1 billion now, and it has tied up with small and medium enterprises to expand its reach; a threat to its biggest competitors Snapdeal and Amazon. It has also made exclusive contracts with Motorola and Xiaomi to sell their phones in India, an idea that has certainly paid off. Xiaomi's Mi3 infact was sold off within 39 minutes after being put up on sale, even crashing the Flipkart server.
The last fund raising of Flipkart was in June 2013 when it raised $570 million, making a total of $730 million till the fundraising today which adds another $1 billion to its kitty.
The question is how will it spend the money. It could acquire more companies like it did with Myntra earlier this year. It could build up on its inventory and back end to support the next round of expansion as well. This fund raising will now push its competitors to either get listed through an IPO or think of similar sources of big funding to keep up with the ecommerce behemoth.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}