Flipkart raises $1 bn, enters top tier of global startup superstars





Co-Founder Sachin Bansal Pins Hope On India's Fast-Growing Internet User Base

E-commerce biggie Flipkart has raised an eye-popping billion dollars of fresh funds, valuing the seven-year-old company at almost $7 billion post-in vestment, as investors reposed faith in India's consumer internet story .

The valuation places its founders Sachin Bansal, 32, and Binny Bansal, 31, among the richest In dians. With their 15% stake, the two are wor th a shade over $1 billi on. It also puts the Ba ngalore-based e-tailer in the top tier of privately-held internet ventures globally, comprising startup superstars like taxi-hailing smartphone app Uber, Airbnb, Dropbox and Pinterest. Flipkart on Tuesday raised over $1 billion in fresh funds, taking it to the top tier of online ventures like Uber, Airbnb, Dropbox and Pinterest, all of which are valued between $4 billion and $18 billion and are backed heavily by venture capital funds.

The $1 billion fund-raise comes two months after Russian billionaire and fervent internet investor Yuri Milner's DST Global led a $210 million round into Flipkart at a valuation of around $3 billion. Existing investors Tiger Global and South African media & internet giant Naspers have co-led the latest round, Flipkart co-founder Sachin Bansal said, announcing the fundraise to the media.

A new investor came in the form of Singaporean sovereign wealth fund GIC. Facebook investor Tiger Global, Naspers—the two put in about $250 million each—ICONIQ Capital and Accel Partners have together pumped in almost 60-70% of the money, people familiar with the deal said.

Tiger Global alone has invested more than $600 million in Flipkart and could take its exposure to $1 billion, surpassing what it invested in Facebook. Other investors, including DST Global, Morgan Stanley and Sofina, also participated in this latest round of funding, Flipkart said in a press release. While this round was done through fresh issuance of shares, a secondary sale amounting to $250 million

at a valuation of around $3 billion. Existing investors Tiger Global and South African media & internet giant Naspers have co-led the latest round, Flipkart co-founder Sachin Bansal said, announcing the fundraise to the media.

A new investor came in the form of Singaporean sovereign wealth fund GIC. Facebook infund GIC. Facebook investor Tiger Global, Naspers--the two put in about $250 million each--ICONIQ Capital and Accel Partners have together pumped in almost 60-70% of the money, people familiar with the deal said.

Tiger Global alone has invested more than $600 million in Flipkart and could take its exposure to $1 billion, surpassing what it invested in Facebook. Other investors, including DST Global, Morgan Stanley and Sofina, also participated in this latest round of funding, Flipkart said in a press release. While this round was done through fresh issuance of shares, a secondary sale amounting to $250 million from some of the smaller investors who came through the Myntra acquisition is a likely possibility , sources privy to the matter told TOI.

In all, Flipkart has raised close to about $1.7 billion in risk capital as it fights it out with Amazon and domestic rival Snapdeal in the fastgrowing e-commerce market touted to touch $8 billion in size by 2016. The funds will be used to step up investments in technology and logistics and set up a strong mobile ecosystem by rallying forces behind a mobile payments ecosystem. "India has 243 million internet users, and this number continues to grow very fast. We believe that the power of mobile in ternet is going to help us achieve this goal," Sachin Bansal said, adding that the vision was to make Flipkart a $100 billion company over the next few years.

Alibaba, the Chinese e commerce giant which is slat ed to list on the New York Stock Exchange with a much ballyhooed IPO valuing it at around $150 billion, and Ama zon, with a market capitaliza tion of $149 billion as of Tues day, are the top two online retailers globally. However, go ing public like Alibaba and Amazon is not on the cards for Flipkart, at least in the near term, Bansal said.

"The world is slightly different now as compared to ten years ago. Today, private investors have enough long term appetite and that's what we have seen across the world , whether it's Alibaba, Airbnb or Uber. In fact, a lot of Facebook investors are still invested even after their IPO," he told TOI.

Deepak Srinath, director, digital practice, at Bangalorebased investment bank Allegro Capital, said the new round of financing puts Flipkart in the league of Chinese internet companies. "With this kind of war chest, it makes Flipkart even more competitive and gives it the ammunition to take on Amazon. While the promoters may make a public stance that they are not keen on a listing, over the next two-three years a listing would be on the cards. Flipkart is now pretty much an investorled company," he said.

Amazon announced on Monday that it will open five more fulfillment centres in addition to the ones in Bangalore and Mumbai as it works on the India market amid investor pressure in the US due to its inability to clock consistent profits.

Flipkart, which is expected to have crossed a run rate of $2 billion in gross merchandise sale, has halved its monthly losses from $5 million one year ago, helping it attract investor interest. The online retailer may raise another $2 billion in the next three years, a timeline by when the investors hope for a possible US listing at a valuation in excess of $20 billion, a source directly familiar with the developments told TOI.

this kind of war chest, it makes Flipkart even more competitive and gives it the ammunition to take on Amazon. While the promoters may make a public stance that they are not keen on a listing, over the next two-three years a listing would be on the cards. Flipkart is now pretty much an investor led company ," he said.

Amazon announced on Monday that it will open five more fulfillment centres in addition to the ones in Bangalore and Mumbai as it works on the India market amid investor pressure in the US due to its inability to clock consistent profits.

Flipkart, which is expected to have crossed a run rate of $2 billion in gross merchandise sale, has halved its monthly losses from $5 million one year ago, helping it attract investor interest. The online retailer may raise another $2 billion in the next three years, a timeline by when the investors hope for a possible US listing at a valuation in excess of $20 billion, a source directly familiar with the developments .