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E-commerce giant Flipkart raises $700 mn at a valuation of $15 bn

Online
marketplace Flipkart has closed a funding round of $700 million at a valuation
of $15 billion, scooping up capital for the first time this year.

Online
marketplace Flipkart has closed a funding round of $700 million at a valuation
of $15 billion, scooping up capital for the first time this year.

According to a Times of India report, existing investors including Steadview
Capital participated in the latest fundraise. Flipkart co-founders Sachin
Bansal’s and Binny Bansal’s holdings of about 8.5 % each in the online
marketplace are now worth more than $1 billion.

Last week, we reported that rival Amazon was readying a $5 billion war chest to
grow India into its largest market outside the US. With Snapdeal and Paytm also
gaining rapidly and threatening to grab a larger share, Flipkart has been
paying top dollar to hire talent from Silicon Valley, scale up logistics and
delivery engine, as well as venture into new businesses such as advertising.

Flipkart has been in negotiations with New York-based hedge fund Tiger Global
and other investors since early this year for another mammoth round of
capital-raising of at least $1 billion, reports the Times of India.

Hitherto, the company has raised about $3.4 billion from global investors keen
on India’s growing consumption and a rising young middle class more comfortable
than ever with shopping online. In December, Flipkart secured $700 million at a
valuation of about $11 billion only six months after it had raised $1 billion,
making 2014 a record year for it.

By 2020, India’s internet market is expected to grow to $137 billion from $11
billion in 2013, according to Morgan Stanley.


According to com-Score data, Amazon India reached 23.6 million unique visitors
in May, edging past Flipkart’s 23.5 million unique visitors. Snapdeal had 17.9
million unique visitors that month. In a bid to overcome the challenge,
Flipkart is adding high-margin categories such as furniture, homes and travel
booking, which it expects will boost its annual sales in terms of GMV to $10-12
billion in 9 months to a year, more than double the $4 billion it achieved in
2014-15.

Recently, Flipkart
teamed up with Tiger Global to invest around $12 million in online home rentals
startup Nestaway,
marking its third investment in new ventures this year. According to the
report, Flipkart, which bought a stake in WeHive in January and co-invested in
online freight-booking service Zinka, is actively scouting for more buys.

Chinese e-commerce
giant Alibaba also wants a piece of the pie. The company is in advanced talks
to increase its stake in Delhi-based Paytm to 40% by investing an additional
$600 million in it. Alibaba founder Jack Ma has visited India several times
after its blockbuster initial public offering in the US last year and has put
in place a team to focus on making strategic bets in the country.

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