Flipkart raises $20 mn from Tiger Global for supply chain expansion

Bangalore: New York-based hedge fund Tiger Global has invested another $20 million (around ₹ 90 crore) in Flipkart Online Services Pvt. Ltd, which runs e-commerce site Flipkart.com, India’s largest online book store. The Bangalore-based start-up had raised some $10 million from Tiger Global exactly a year ago.

The fresh round of funding will be utilized by the company for strengthening supply chain capacity and upgrading technology platforms, including automation at warehouses.

“These funds will enable us to build more capacity in our supply chain so that we can shrink customer delivery timelines while expanding our product base,” said Sachin Bansal, chief executive officer of the company.

With its eyes set on becoming the largest e-commerce company in the country, Flipkart introduced new product categories such as mobile phones, electronics, games, music and movies over the past year.

It plans to add more product lines in the future. “We are not restricted to one category. We are evaluating quite a few options like fashion, apparel, beauty and baby products. This year our focus would be on offering the full range of electronics,” Bansal said.

The company is targeting revenue of ₹ 4,500 crore by fiscal 2015 on increased broadband penetration and a wider product portfolio.

Its revenue in the year ended 31 March were around ₹ 75-80 crore and it’s already operationally profitable. Over the past two years, the firm has grown at a compounded annual growth rate (CAGR) of over 600%.

The e-commerce industry in India is expected to grow by about 47% in 2011 to touch ₹ 46,520 crore in revenue by the year-end, according to a report by the Internet and Mobile Association of India (Imai).

E-retail will contribute 6%, about ₹ 2,700 crore, to this market, according to Imai.

E-commerce start-ups have attracted significant investor interest recently in India. One of the biggest investors in the space is Tiger Global. In May, it invested $16 million in online retailer, Exclusively.in.

Its other deals include an investment of $2.5 million in babycare products retailer BabyOye.com, along with Accel Partners.

“The growth of these companies can’t be sustained without capital,” said Mohit Agarwal, senior associate at investment bank Equirus Capital Pvt. Ltd, adding that the current business environment is conducive to fund-raising. “Valuations are very good right now. Even if one is raising $30 million, dilution of stake is minimal.”

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