tech2 News StaffJul 29, 2014 16:24:39 IST
Flipkart, India's largest e-tailer, has announced it raised a fresh round of funding worth $1 billion (Rs 6,000 crore) as it tries to aggressively scale up after Amazon's rapid expansion in the country has heated up competition.
This is the biggest funding round for an Indian company, and globally, second only to Uber, which raised $1.2 billion in June this year. It equals Facebook's $1 billion funding in 2011.
Flipkart, founded in 2007 by two former Amazon employees, has raised $760 million since its launch and now the total funding amount stands close to $1.75 billion. The company said Singapore sovereign wealth fund GIC participated in the fundraising along with existing investors Tiger Global Management LLC and the South African media company Naspers Ltd .
The company, which is popular for selling books and electronics online, operates as a marketplace that allows third-party vendors to sell products on the site. Earlier this year Flipkart acquired fashion portal Myntra and crossed $1 billion in gross merchandise value. It is now expected to be valued at $5 billion (Rs 30,000 crore), according to industry estimates. An Economic Times report says the company is now valued at $7 billion (Rs 42,000 crore)and earlier this year hit the sales mark of $1 billion (Rs 6,000 crore).
Amazon, which entered India last June, has taken on rivals by slashing prices, launching next-day delivery, adding new product categories and embarking on a high-voltage advertisement campaign.
The companies vying for a bigger slice of the Indian online retail market include New Delhi-based marketplace Snapdeal, which is backed by eBay, fashion retailer Jabong, and global giants Amazon and eBay.
The Indian e-commerce market was worth $13 billion in 2013, with online travel accounting for over 70 percent of consumer e-commerce transactions. Online sales of retail goods totaled $1.6 billion in 2013, according to research firm Forrester, and are expected to reach $76 billion by 2021, Technopak said.
By comparison, China's business and consumer e-commerce sales may surpass $180 billion this year, with industry leader Alibaba readying an initial public offering (IPO) in the United States.
With inputs from Reuters
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