Tuesday, November 25, 2014

Fund-raise values Flipkart at $10 billion

Fund-raise values Flipkart at $10 billion
The latest fund-raise saw the participation of only one new investor, sources said. 

India's largest e-commerce player Flipkart has closed a $500-600 million fresh financing round led by its existing large investors at a massive pre-money valuation of $10 billion, giving it further ammunition to fight out rivals Amazon and Snapdeal. Tiger Global, South Africa's Naspers and Yuri Milner's DST Global, along with others, have pumped in $50-100 million each in the new round with a new investor chipping in a nominal amount, sources familiar with the matter told TOI. At the company's board meet in Singapore recently, the fund-raise was formalized and an announcement could be made shortly.

The latest fund-raise saw the participation of only one new investor, sources said. TOI had reported in its November 10 edition that Flipkart was in the midst of raising fresh capital just three months after it closed a $1-billion raise, valuing it at $7 billion then. Sources said the latest move was part of Flipkart's regular fund-raising plans till it readies itself to go public on the US bourses in the next 36 months. As reported by this newspaper, the company could raise anywhere between $2 billion and $3 billion within this time frame.

In an emailed response, a Flipkart spokesperson said the company had no comments to offer.

This would be the third fund-raise this year for the company, which was started by two ex-Amazon employees Sachin Bansal and Binny Bansal (not related) — who were also batch mates at IIT-Delhi — as an online bookstore in Bangalore. Since then, the seven-year-old company has expanded to become a horizontal e-commerce player selling electronics, fashion and baby care, among many other categories.

"Although there was a lot of interest from new investors, Flipkart was not keen on raising more money at this point. This new round is largely being done by the large existing investors," said a source. Some early investors in Flipkart may have not participated in this new financing round.

The latest fund-raise valuing Flipkart at over $10 billion catapults the online commerce biggie right up into the top tier of the world's most valued privately-held tech startups like Uber, Snapchat, Airbnb and Dropbox. With this, Flipkart would have raised around $2.3 billion in funding till date.

Tiger Global, the Wall Street investment firm, a fervent backer of Indian internet startups, is the largest stakeholder in Flipkart, having invested about $700 million over the past four years.

Just last month, Japan's SoftBank pumped $627 million into Delhi-based online retailer Snapdeal, signaling the investor exuberance around India's consumer internet story buoyed by the rapid adoption of internet-enabled smartphones.

Flipkart has already hit a $3-billion revenue run rate, as reported earlier by TOI, on the back of exclusive tie-ups with mobile handset makers Motorola and Xiaomi, and its growing market share in the fashion category post its acquisition of Myntra.

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