Flipkart raises $700 million in fresh funds2 min read . Updated: 20 Dec 2014, 12:42 PM IST
Until now, Flipkart has received nearly $2.5 bn in capital from investors; the latest fund raise follows a $1 billion round in July
Bengaluru: India’s largest e-commerce firm Flipkart Pvt Ltd said it received $700 million in fresh funds, bringing its overall fund raising this year to nearly $2 billion and strengthening its status as one of the most sought after Internet companies globally.
As many as five new investors, Qatar Investment Authority, Baillie Gifford, Greenoaks Capital, Steadview Capital and T. Rowe Price Associates participated in the latest round, while four of Flipkart’s existing investors, DST Global, GIC, ICONIQ Capital and Tiger Global, also put money into the company. Flipkart’s other existing investors including Accel Partners, Dragoneer and Sofina Capital did not participate in this round.
Singapore incorporated Flipkart Ltd said it filed with that country’s regulator for conversion to a public company, a mandatory procedure for all companies where the number of shareholders exceeds 50. The company clarified that its filing ensures was to ensure compliance with laws and not at all indicative of an initial public offering.
Mint first reported on 10 December that Flipkart was in advanced discussions to raise $700 million-$1 billion from at least three new investors at a valuation of $11-$12 billion.
According to Mint research, around $4 billion has already been invested in e-commerce this year, after a two-year period when most venture capital firms steered clear of online retailers.
Flipkart and its rivals— Snapdeal and Amazon India—are topping up their war chests, allowing them the flexibility to buy attractive start-ups, offer deeper discounts to buyers and increase their logistics reach for a bigger slice of the fast-growing e-commerce market in Asia’s third biggest economy.
The latest fund infusion into Flipkart will give the company more fuel to pursue its aggressive market share acquisition strategy. The addition of deep-pocketed new investors also offers external validation to the company’s largest investors Tiger Global and Naspers of their large bets on Flipkart.
Until now, Flipkart has received nearly $2.5 billion in capital from investors. The latest fund raise follows a $1 billion round in July.
The company’s rivals Snapdeal and Amazon India are also pumping in massive amounts of money in an attempt to overtake Flipkart, which remains the clear market leader. Snapdeal raised $627 million from Japan’s SoftBank Group in October and earlier this year, Amazon chief executive Jeff Bezos promised to invest $2 billion in India over time.
Flipkart is currently among the most sought-after private companies globally and is considered by some analysts as the next big online retail business after China’s Alibaba, which went public earlier this year and is now valued at more than $250 billion.
Flipkart Pvt. Ltd, Flipkart’s holding entity registered in Singapore, posted a loss of Rs644.37 crore on revenue of Rs1,163.1 crore in 2012-13, according to documents filed with the Singapore government. The firm is yet to file its latest financial results.