With $1Bn In Basket, What's Next For Flipkart?
India’s largest online retailer, Flipkart, has raised $1-billion (Rs 6,013 crore) funding in fresh capital in a bid to scale up and put rivals such as Amazon at bay. While this is one of the largest investments raised in a single round globally, it now sets its sights on making their company a $100-billion entity by valuation in the next few years from the current $7 billion.
“This is big milestone not just for Flipkart, but for Internet firms in India in general,” said Sachin Bansal, Flipkart co-founder and CEO on the recent fund-raising adding that the company wishes to be the first $100 billion internet company from India.
Globally there are only five; three from US and two from China. “This funding would gears us up to achieve exactly that,” he said in an interview with ET.
The recent round of funding was co-led by existing investors Tiger Global Management and Naspers. The company will utilize the proceeds to make long-term strategic investments in India, especially in mobile technology, Flipkart said in a statement, which added that Singapore’s sovereign wealth fund GIC, along with existing investors Accel Partners, DST Global, ICONIQ Capital, Morgan Stanley Investment Management and Sofina, also participated in the fund-raising.
The company has around 22 million registered users and handles five million shipments in a month. “We believe the Internet will improve the quality of life for millions of Indians, and e-commerce is going to play a huge role in this change. The focus at Flipkart is to continue to make shopping online simpler and more accessible through the use of technology,” said Sachin Bansal, Flipkart founder and CEO.
While there were talks on the company going public earlier, Bansal clarified that IPO is not in consideration of the company. “We have not settled on a business model that we can take public,” he said.
A long way…!!!
In May, Flipkart had raised $210-million funding, bringing private equity firm DST Global on board as an investor. With the recent funding, the e-commerce giant has received $1.78 billion since it started in 2007, along with $1.57 billion over the past year, according to reports.
Founded by Sachin Bansal and Binny Bansal, classmates at IIT-Delhi, who quit their jobs at Amazon to start Flipkart, the company made a humble beginning as an online bookstore, as it started selling products across categories, including fashion, furniture, white goods and electronics. The Bangalore-based firm annualized sales crossed $1 billion with the acquisition of fashion portal Myntra earlier this year, and it also estimated to reach the billion dollar mark for gross merchandise value by 2015.
Flipkart in March hit $1 billion in sales a, a target which it achieved a year ahead of plan. To take on rivals Amazon, another e-commerce company which has strong presence in India, has been slashing prices, launching next-day delivery, adding new product categories and embarking on a high-voltage advertisement campaign.
So, with $1-billion in its bag what would be the next step for Flipkart? There are of course plenty of plans in the pipeline for the e-commerce major. While India currently has243 million internet users, Bansal said he would want to enable every Indian to either shop or sell online, as he believes that the power of the mobile Internet is make this sector stronger in the coming months.
The company also plans to develop its mobile commerce platform further as 50% of their transactions happen on mobile devices, says a Quartz report. While Bansal said the company is keen on further acquisitions, it is reportedly hiring 12,000 people this year to strengthen its support and technology operations and other specialized talents from internet companies in the Silicon Valley.
The company is also going to focus on wearables market – one of the hottest segments in technology in recent times - and is roping in experts to step up its R&D work in this space, it said.
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