New Delhi: India's biggest e-commerce retailer Flipkart has raised $1 billion (or Rs 6,000 crore) in fresh funding, the biggest ever by an Indian internet company.
The latest cash injection in Flipkart sets the stage for a battle with another online retailing giant Amazon which recently announced that it will open five new centres across India to ensure faster product delivery in the fiercely competitive online shopping space, currently dominated by homegrown players like Flipkart and Snapdeal.
The funding was led by existing investors Tiger Global and Naspers with participation from Accel Partners, DST Global, Iconiq Capital, Morgan Stanley Investment Management and Sofina.
"The fresh round of funding is a great milestone in the e-commerce industry of India," Flipkart's co-founder Sachin Bansal saud in Bangalore. “The funding was "validation of the view that India's Internet could produce multi-billion dollar companies,” he added.
Flipkart, founded in 2007 by two former Amazon employees, has raised $760 million (Rs. 4,200 crore) since its launch and the recent funding round makes it valuation at $7 billion (around Rs 42,000 crore), according to some estimates. The company initially began with music and books and expanded rapidly into mobiles, appliances and other goods.
"We were a little kid waiting to grow up. Now we have grown up with this funding," said Sachin Bansal, the co-founder & CEO. If the company gets listed in India, it would be amongst 50 most valuable firms in the country with twice the market value of Colgate, which was set up here in 1937.
Co-founder Sachin Bansal has said an IPO is not on the cards for the next two years. He said the funds from the current round would be used to invest more into e-commerce ecosystem like logistics and payment systems.
The company may also look at making fresh acquisition in the e-retailing space beside using the funds for expansion. In May this year, Flipkart acquired the country's biggest fashion portal Myntra for around $300 million (Rs. 1,800 crore).
The Indian e-commerce market was valued at $13 billion (Rs. 78,000 crore) in 2013, with online travel accounting for over 70 per cent of consumer e-commerce transactions. Online sales of retail goods totaled $1.6 billion (Rs. 9,600 crore) in 2013, according to research firm Forrester, and are expected to reach $76 billion (Rs. 4.5 lakh crore) by 2021, Technopak said.