Flipkart has joined the big league of e-commerce with its latest round of fund-raising. The firm has managed to attract as much as a billion dollars from a clutch of existing investors, including Tiger Global, Accel Partners, Naspers, and a new investor in the form of Singapore's sovereign wealth fund GIC. With this latest round of fund-raising, Flipkart is valued at around USD 7 billion. This is more than double the valuation the company received in its last round of fund-raising in May.
"Investors are finding a great team at Flipkart, which has proved that they can execute. They are also looking at the market size. The market size is expected to be really big and internet is right now at the inflexion point and that is attracting a lot of investors to Flipkart," Sachin Bansal, Co-Founder & CEO, Flipkart told CNBC-TV18's Vineetha Athrey.
Had it been listed, Flipkart would be the 44th largest company by market cap on the BSE, with a valuation of USD 7 billion (roughly Rs 42,000 crore). The top 10 listed brick and mortar retailers in India (including Trent, Shoppers Stop, Future Retail) have an aggregate valuation of Rs 16,200 crore. However, it is nowhere near its global competitors like Amazon and e-Bay, which have market caps of USD 150 billion and USD 65.7 billion respectively.
Also Read: Smaller players carve out a niche in India's e-tailing mkt
Flipkart co-founders Sachin Bansal and Binny Bansal (not related) have set their sights high — to be the India's first internet company to be valued at USD 100 billion. It looks a daunting task at this point, considering that that the company is not yet profitable. The Hindu Business Line quoted the founders as saying that the company "was on its path to profitability", and that it did not disclose any numbers other than saying it had 22 million registered users and handled 5 million shipments every month. For now, the homegrown e-retailer has put its IPO plans on hold, but it remains an option for raising further funds.
Flipkart said it has 22 million registered users and handles 5 million shipments every month. A while back, Flipkart had announced that it was India's first online retailer to hit USD 1 billion in gross merchandise value. Flipkart's most recent acquisition, fashion e-tailer Myntra, has worked out well for them so far.
According to an Economic Times Report , apart from tech buyouts, the company could look at acquisitions in categories such as furniture. Portals such as Pepperfry and Urban Ladder, which raised funding in the past few weeks, are seen as likely targets. Though confident about hitting the mark, Bansals have not put a timeframe to their USD 100 billion target.
Flipkart's mantra: Trend is your friend
The Bangalore-based firm will utilise funds on expanding its online and mobile services, focusing on areas like R&D, enhancing customer experience and sellerbase, co-founder Binny Bansal said. India currently has 243 million internet users but the user base is expanding rapidly as the use of smart phones increase. India will have over half-a-billion mobile internet users by 2020, Flipkart estimates.
"From a competition point of view, we are looking at our own data and our own trends that we are seeing at Flipkart and constantly making plans based on the trends. That has been driving our execution plans mostly. It is what our customers are asking us to do and we are following that largely.
From an expansion point of view we are looking to get everything onboard. We are opening our platform for all kinds of sellers. We have a few categories that are still not there like furniture so that is something that is only about time that we will have everything. Very soon we will have a lot of things, we just want to be a platform for everything," Sachin said.
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