Flipkart Funding- Bar Raised | Fresh $ 200 million infused

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Winner takes it all- India (Bengaluru based) based leading online retailer Flipkart.com has raised a fresh $ 200 million (~ INR 1200 crores) from existing investors its existing investors including South African technology company Naspers Group and private equity firms Accel Partners and Tiger Global amid weak e-commerce fund draught in India. This will add-up to the total of USD 380 million raised so far by flipkart.

This makes it the largest ever amount to be invested in an e-commerce company in India in a single round. This also matches the $200-million funding that mobile advertising network Inmobi had raised from Japan’s Softbank, the single largest funding round for a new generation tech firm in India.

The fresh round of funding comes soon after Flipkart’s foray into the marketplace model which eliminates the problem of inventory-based e-commerce model. The Bangalore-based company said the funding will be used for building and strengthening its technology capabilities, bolstering the supply chain and developing talent pool.

Few major factors that boost the confidence of venture capitalists among others are:

  • Registered User- 9.6 millions
  • Unique Visitors- 1 Million/day
  • Peak Product Shipping- 130000 (June’2013)
  • Online Payment solution launched- PayZippy
  • Several new categories launched- Apparels, Footwear, Toys, Accessories, Sports & Fitness, e-books, e-music (Flyte).

Flipkart is estimated to have raised over $380 million so far. In August last year, the company had raised about $150 million in a round led by Naspers and participated by Tiger Global. However, the company had not disclosed this publicly. Prior to this, it had raised $20 million in 2011 and $10 million in 2010 from Tiger Global.

The move sets the stage for a battle between Flipkart and the company it is modeled on, Amazon.com Inc., which launched its India site in June, although it is not clear whether the company has incorporated a subsidiary in India.

The new infusion of funds may make it difficult for rivals such as Myntra, Snapdeal and Jabong to close the gap with Flipkart, experts said. Funding has 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 companies have managed to raise further rounds, according to a May report by Allegro Capital Advisors, an investment bank.

Bansal said this investment will help Flipkart grow to the next level to pioneer technology and supply-chain innovations that will change the face of online shopping. “This will not only enable us to reach our goal of billion gross merchandise value (GMV) by 2015, but also help us achieve bigger milestones in the future.”

Started in 2007 by IIT Delhi alumni Sachin Bansal and Binny Bansal, Flipkart now boasts of 9.6 million registered users with almost one million users visiting the website every day. From being the largest e-tailer of books, it has now forayed into all possible products, which can be sold online starting from electronic items to apparel to fashion accessories.

Just to give you an example, last month there was a day when we delivered 130,000 items, which means we had to deliver about 1.5 items in a second. During the peak hours in the day, we are delivering like four to five items a second over 200 cities in India. To handle that kind of scale and speed, we are bringing in the best processes and automation technologies available from across the world

-Binny Bansal, co-founder and COO of Flipkart.

According to the company, the immediate goal before it is to expand its marketplace platform, which now sells goods of about 500 merchants. The company is slowly building the fulfilment obligation for the end customers. As a part of which, it is also planning to monetise its warehouses by offering it to its registered merchants for a price.

Flipkart has also set a target to achieve $1 billion in GMV by 2015. According to Sachin Bansal, it has crossed the half-way mark and is comfortably placed to achieve this milestone before the target year.
Most Funded e-commerce venture in India

Flipkart Milestones

  • Flipkart received $200M in Series E funding.     (7/10/13)
  • Flipkart received $150M in Series D funding.     (8/24/12)
  • Flipkart acquired LetsBuy.com.                        (2/9/12)
  • Flipkart received $20M in Series C funding.       (6/16/11)
  • Flipkart received $10M in Venture Round funding.     (6/16/10)
  • Flipkart added Sachin Bansal as Co-Founder.     (10/1/07)
  • Flipkart added Binny Bansal as Co-Founder.     (10/1/07)

Most funded e-commerce ventures in India
Domain Name Funding (in million USD) Investors
Flipkart 380 Nasper, Tiger Global, ICONIQ Capital, Accel Partners
Snapdeal 114 eBay, Nexus Ventures, ru-Net, Kalkaari Capital, Bessemer Venture Partners, Recruit Holdings, Intel Capital, Saama Capital & Others
Homeshop18 99 SAIF Partners, OCP Asia, GS Home Shopping, Capital18
Myntra 64 Tiger Global, Accel Partners, Kalkaari Capital, IDG Ventures
Fashionandyou 50 Norwest Venture Partners, Intel Capital, Sequoia Capital, Nokia Growth Partners
Data Source: VCCEdge, Approx $ figures

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