India’s largest e-commerce company, Flipkart, said on Tuesday it raised $ 1 billion — about Rs. 6,000 crore — in a new round of private equity investment said to be the largest fund-raising by an Indian e-tailer.
The funds will help Flipkart hire, acquire and fire up for growth in audacious plan to be a $100-billion company and take on cutting-edge US online retailer Amazon.com.
The company founded by Sachin and Binny Bansal — IIT-Delhi alumni unrelated to each other — announced that a clutch of high-profile investors had put in the funds but did not disclose the stakes or the valuation. Market analysts put the value at $5 to 7 billion.
At the higher end of Rs. 42,000 crore, the valuation would put the company founded in 2007 in the same league as public sector refiner Bharat petroleum Corp Ltd (BPCL) and aluminium giant Hindalco.
“Building a $100-billion company is not an easy task. We are giving it our best shot. We are confident that we will reach there,” chief executive Sachin Bansal, who will turn 33 on August 5, told a news conference in Bangalore.
The company earlier conducted two rounds of investment to raise $540 million and $210 million respectively at different valuations.
The company is aided by a tailwind of digital explosion. India’s Internet user base is expected to touch 500 million by 2020, up from the currently estimated 200 million.
The investors chipping in this time include Morgan Stanley Investment Management, Singapore’s sovereign wealth fund GIC, venture capital firm Accel Partners, technology firm DST Global, multi-family investment vehicle Iconiq Capital and Belgian investment holding company Sofina. Apart from GIC, the others are already invested in it.
Flipkart acquired online apparel retailer Myntra for $330 million two months back. It said it would use the funds raised for further acquisitions, investments in technology and to hire tech talent.
Initial public offering (IPO) plans are on the backburner. “We will do IPO when we are ready, when the market is ready and when the Flipkart business model stabilises,” Sachin Bansal said.
Flipkart reported a loss of Rs. 282 crore in 2012-13, while revenues soared five-fold to Rs. 1,180 crore during the financial year. The company has 22 million users and handles 5 million shipments every month.