A chunky $9 billion has flowed into e-commerce ventures in 2017 in a sign Indian e-retailers are living up to their promise. After a somewhat dul2016, which attracted $4.5 billion in investments, private equity players and venture capitalists firms have upped their exposure to e-tailers. To be sure, a big amount of the $9 billion — $4 billion — has been committed by one big investor, SoftBank. The Japanese investor has bought stakes in Flipkart, OYO Rooms, Ola and Paytm. Data from Tracxn Technologies show the Masayoshi Son-led conglomerate has bet close to $6 billion in the last three years. China’s Alibaba Group too picked up a stake in Paytm Mall and put in a good $280 million into e-grocer BigBasket. In October, taxi-hailing service Ola closed out a funding of $1.5 billion from SoftBank, Tencent Holdings, RNT Capital and Tekne Capital Management.
SoftBank’s investment of about $2.5 billion in Flipkart, via its $100-billion Vision Fund, has made it the largest shareholder in the Bengaluru-based e-retailer, displacing Tiger Global, which made a partial exit following the deal. In May, food-tech company Foodpanda’s parent DeliveryHero raised $431.45 million from South African internet investor Naspers. Delivery Hero said at the time it would fund a part of its India operations. Meanwhile, Amazon continues to infuse capital into its India arm from time to time and has invested $2.6 billion in the current financial year, according to registrar of companies filings. The investments are part of Amazon’s commitment to invest $5 billion in the India operations. The company’s revenue at it marketplace arm more than doubled in the year to March. Amazon Seller Services’ revenue rose 105% in the year according to an Amazon India spokesperson quoted in the Mint newspaper. Regulatory filings revealed a rise of 41%.
Rahul Chowdhri, partner and co-founder, Stellaris Venture Partners, says managements are keeping a watch on margins, the cost of customer acquisitions and the monthly cash burn. “While some good businesses continue to get financial support, the rest must build a strong business so investors are convinced,” Chowdhri said.Rahul Chowdhri, partner and co-founder, Stellaris Venture Partners, says managements are keeping a watch on margins, the cost of customer acquisitions and the monthly cash burn. “While some good businesses continue to get financial support, the rest must build a strong business so investors are convinced,” Chowdhri said.