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Home / Companies / Flipkart seeks valuation of over $10 billion in new financing

Bangalore/New Delhi: Barely three months after raising a mammoth $1 billion, Flipkart is in discussions with existing and new investors to raise another large round of funds, three people familiar with the matter said.

Flipkart, India’s biggest online retailer, said on 29 July that it had received as much as $1 billion in fresh capital from existing investors including Tiger Global, Naspers and Government of Singapore Investment Corp., the city-state’s sovereign wealth fund. That fund raising was the largest-ever by an Indian startup and among the largest-ever by any Internet startup globally.

In the next round, Flipkart may raise more than $1 billion, two of the three people cited above said, on condition of anonymity. The two cautioned that the company hasn’t made a final decision on the amount. Mint couldn’t verify the investors Flipkart is speaking with to raise its next round.

Flipkart is looking for a valuation of more than $10 billion, according to a report by the Wall Street Journal, which reported the news earlier on Saturday.

Mint couldn’t verify the valuation figure independently. Flipkart declined to comment.

After more than two years when investors steered clear of most online retailers, venture capital firms and others have pumped in more than $3 billion into Internet companies this year, according to Mint research. India is one of the last under-penetrated and potentially large e-commerce markets in the world and investors are betting that after China, the next bunch of large e-commerce companies are likely to come from Asia’s third-largest economy. Their bet is based on the expectation that with growing penetration of the Internet and smartphones and rising incomes, a few hundred millions will shop for products on e-commerce sites and their mobile platforms.

Flipkart has received $1.8 billion since it started out in 2007, including $1.57 billion over the past 15 months. It raised $360 million last year in two rounds, even as investors were steering clear of most e-commerce firms, and followed that with a $210 million fund raising, mostly from DST Global, in May.

Flipkart, Amazon India and Snapdeal are engaged in a highly cash intensive battle for dominating India’s e-commerce market, which was valued at $3.1 billion last November by brokerage CLSA.

Last week Snapdeal said it received $627 million from Japan’s SoftBank Group and another “large" amount from existing investors. SoftBank is also the largest investor in China’s Alibaba, which went public earlier this year in one of the largest-ever IPOs globally. In July, Amazon’s chief executive Jeff Bezos promised to pump in as much as $2 billion in the company’s Indian operations over time.

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