FLIPKART, India’s biggest online retailer, said on Tuesday that it has raised $1 billion in fresh capital from a clutch of existing investors, including Tiger Global, Accel Partners, Naspers, Morgan Stanley Investment Management, and a new investor in the form of Singapore’s sovereign wealth fund GIC.
The Bangalore-based firm has been valued at between $5-7 billion after the latest round of funding, up from the $3 billion valuation it received in its last round in May. Flipkart is expected to utilise the fresh round of funding to take on competition from an increasingly aggressive Amazon, which launched its India operations a little over a year ago. The seven-year-old online retailer, the leader in India’s fast-growing e-commerce market, plans to deploy the funds to expand its logistics network, build more warehouses and spend on marketing and discounts.
The $1-billion fresh investment in Flipkart is nearly double the $550 million the company had raised till the end of the 2013 fiscal, as per a June 25 report of the Indian Software Products Industry Roundtable (iSPIRT). “The funds will be used to make long-term strategic investments in India, especially in mobile technology,” chief executive officer Sachin Bansal said. “This (new funding) will enable us to step up our investments for innovations in products and technologies, setting us up to become the mobile e-commerce company of the future. This funding will help us further accelerate momentum to become a technology powerhouse.”
The company also plans to hire 1,000 engineers with an eye on expanding its R&D capabilities and is also looking at roping in mobile and technology experts from Silicon Valley.
With the latest fund-raising, Flipkart has received $1.75 billion since it started out in 2007, including $1.57 billion over the past year. It raised $360 million last year in two rounds, even as investors kept away from most e-commerce firms, and followed that with a $210 million funding from four investors, including Russia’s DST Global, in May.
DST Global is owned by Russian billionaire Yuri Milner, a serial e-commerce investor who has bought stakes in companies including US-based Facebook Inc. and Twitter Inc. as well as China’s Alibaba Group.
“We have close to 22 million registered users today. We handle five million shipments a month. These numbers were unheard of a few years ago and we are excited about the scale we have managed to achieve,” Flipkart co-founder Binny Bansal said. With 243 million