 "It's official: Third round of funding secured, Flipkart finally valued at $10 bn")
E-commerce major Flipkart has raised more money from its third round of financing, valuing the largest Indian e-tailer at more than $10 billion. The fundraising by the company comes even as it may reportedly be readying itself to list on the US bourses and raising anywhere between $2-3 billion before going public.
According to a report in Times of India, Flipkart has raised $500-600 million led by its existing large investors Tiger Global, South Africa’s Naspers and Yuri Milner’s DST Global, along with others.
Founded in 2007 by ex-Amazon employees Sachin and Binny Bansal, Flipkart had in July this year raised $1 billion in funding by its existing investors Tiger Global and Naspers, with participations from GIC, one of the two sovereign wealth funds of Singapore, besides Accel Partners, DST Global, ICONIQ Capital, Morgan Stanley Investment Management and Sofina. The company was valuedat $7 billion at the time.
Flipkart hadearlier netted $210 million in a round of financing led by DST Global, Tiger Global, Naspers and Iconiq Capital early this year. Investors are hoping that Flipkart becomes as dominant in India as Alibaba in China, which went public in the US in September, and is now valued at around $280 billion.
Flipkart will reportedly use most of the funds it will raise by the middle of 2015 and will be putting more “marketing muscle” behind in-house brands like Myntra and others while scouting for other acquisitions as well.
Flipkart claims that it had hit an annual revenue run rate of $1 billion in February this year, which means it clocked sales worth over Rs 500 crore that month.
The company is already shuffling its top deck, hiring senior professionals and engaging with management consultants as well as strengthening its quality assurance team. It is also considering working with companies that provide cloud-based solutions to handle massive traffic increases as it seeks to reach between $3 billion and $4 billion of sales in the current fiscal year.
Flipkart has been spending to recruit senior management executives from bigger, more established companies to build a strong leadership team that can fend off rivals. Rival Amazon is already investing $2 billion in its India operations and Japan’s SoftBank recently invested more than $800 million in India and vowed to put more money to work there. SoftBank’s investments include Flipkart rival Snapdeal, the second-largest Indian e-commerce company, which raised $627 million in October.