Growing the war chest: Flipkart could be raising another $1.7 bn

Even as the media speculates on when e-commerce giant Flipkart plans on going public, the etailer is busy growing its war chest and is now reportedly looking to raise somewhere between $500 million and $1.7 billion (approximately Rs 10,500 crore) in the coming months from existing and new investors. An Economic Times report said that Flipkart is attempting to raise $1.7 billion and is looking at a valuation of a whopping $15 billion, its highest ever yet. A Business Standard report pegged the minimum amount that the company would raise at $500 million but didn’t have an upper estimate for how much the company could raise. [caption id=“attachment_2103495” align=“alignleft” width=“380”]  Flipkart founders Sachin and Binny Bansal.[/caption] Flipkart’s biggest investor, Tiger Global Management, could play a important role in this round of funding and could invest upto $700 million in multiple tranches, the Economic Times report said. The fund raising is expected to be another step by the e-retailer to consolidate its position in India’s highly competitive and expanding e-commerce market. The announcement of the fund raising comes on the heels of rival Snapdeal reportedly planning to take it on in the apparel section by acquiring Exclusively.in, a website that sells only designer brands. Flipkart is also aiming to double the total value of goods it sells to $8 billion by the end of 2015 as it attempts to take on rivals like Amazon India that has shown it is willing to take it on. The company’s current GMV is estimated at $4 billion. Industrial estimates say that Snapdeal and Amazon’s India notch up GMVs of around $3 billion and $1 billion respectively. Flipkart aims to ship one billion units a month and to serve 100 million customers by 2018 fiscal year. The company currently ships around 8 million units a month. The company will also be hoping to be the biggest e-commerce player in the country so that they can cut back on the discounts. According to a PWC report , e-commerce companies have already incurred combined losses of around Rs 1,000 crore due to a heavy discounting strategy and this model is not feasible in the long run.