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Mumbai: Online retailer Flipkart.com is in the process of raising $125 million (around 800 crore), merely three months after it raised $200 million—an indication of the continued interest in the company as well as the company’s capital-intensive growth model, and, according to at least one analyst, an eye on valuation.

The investment is being sought by Flipkart Holdings Singapore, the Singapore-based entity created in February this year by the company’s founders to get around the Indian law that doesn’t allow foreign direct investment in e-commerce companies. Flipkart Holdings runs the marketplace. The company’s Indian front-end operations and delivery systems are owned by WS Retail Services Pvt. Ltd.

Bangalore-based Flipkart is in talks with its existing investors, Tiger Global Management Llc, Accel Partners, Iconiq Capital, and MIH (a part of South Africa media company Naspers Group) and at least two other US-based investors for the latest round, said two people close to the development.

“It (Flipkart) is in talks to raise $125 million. There was a clause in the last fund raise that there could be another top up of $100 million to $150 million," said one of the two person cited above, who, like the other, did not want to be identified.

“We are always talking to people. There is always someone interested in us...there is a lot of interest for a business like ours," said Binny Bansal, co-founder and chief operating officer, Flipkart.

In July, Flipkart raised $200 million from its existing investors Tiger Global, Accel Partners, Iconiq Capital, and Naspers Group. This was the largest amount raised by the company in a single round of funding and also the largest in any e-commerce company in India.

Thus far, since 2007, Flipkart has raised $400 million in six rounds of funding.

“It will be the current and a few new investors that will invest in this round," said the second person, who is directly involved with the transaction. This person added that the funding will close in two weeks.

Flipkart was started in 2007 by Sachin Bansal and Binny Bansal—they are not related— as an online bookseller. Since then, it has expanded its product range to electronics, footwear, accessories and apparel.

Meanwhile, funding seems to have dried up for smaller e-commerce firms over the past 18 months. Out of the 53 e-commerce companies that raised $853 million in venture capital over the past three years, only 11 have managed to raise further rounds, according to a May report by Allegro Capital Advisors, an investment bank. If Flipkart’s July fund raising is excluded, there have been 39 investments in the e-commerce space in India thus far this year, for an aggregate investment of $171 million. The comparable numbers for 2012 were 60 deals worth $332 million.

The e-commerce market in the country is estimated to grow from the current $1 billion to $56 billion by 2023, according to the estimates of Ankur Bisen, vice-president, Technopak Advisors Pvt. Ltd, who was speaking on the sidelines of a retail summit in Mumbai last week.

Online retail is expected to account for 6.5% of the total retail market, compared with 0.1% now.

By 2015, Flipkart hopes to sell products worth $1 billion on its site.

The company uses this metric, also called Gross Merchandise Value, rather than the straightforward sales or revenue.

Investors are continuing to put money into Flipkart with an eye on a large ticket public sale of shares in four to five years, said Harminder Sahni, managing director of consultancy Wazir Advisors, citing the example of China’s Alibaba Group Holding Ltd (alibaba.com) which is eyeing an initial public offering (IPO) this year or next, that values it as much as $100 billion.

“Investors are continuing to invest money in the company thinking they can create valuation of $15 billion to $20 billion. Whether it’s possible remains to be seen," said Sahni.

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