Over the years, rising internet and mobile phone penetration has changed the way we communicate and do business. Digital companies lean heavily on the internet and mobile phone revolution to fundamentally alter the way businesses reach their customers.
This year has many highs and lows in the Indian digital ecosystem, particularly the e-commerce sector. In 2014, the country saw big investors from India and abroad putting their money on numerous e-commerce ventures, which have raised funds to the tune of $ 3 billion from individuals, companies and PE firms. And the inflow of funds in expected to continue and maybe grow stronger in the year ahead. The year was also very significant as we saw many important acquisitions in the digital sector.
2014 Funding Roundup
Flipkart – This year, Singapore based Flipkart has around $2 billion from three funding rounds. In 2014, Flipkart has raised over 5 times the money it had raised in 2013. In May 2014, the company raised $210 million from DST Global, Tiger Global, Naspers and ICONIQ Capital. Then with a goal of becoming the “mobile e-commerce company of the future,” Flipkart raised $1 billion in from Tiger Global, Naspers, Singapore government’s GIC, DST Global, Accel Partners. While at the same time, rival and e-commerce behemoth Amazon announced a $2 billion India-specific fund. Less than six months after the company raised $1 billion, the online marketplace rounded off the year with a $700 million round from existing investors DST Global, GIC, ICONIQ Capital and Tiger Global, and new backers Baillie Gifford, Greenoaks Capital, Steadview Capital, T. Rowe Price Associate and Qatar Investment Authority. Flipkart also disclosed that it has applied to become a public company in Singapore, where it is registered. In December, Hong Kong based alternate asset management Steadview announced that they are investing $180 million in Flipkart.
Snapdeal - Snapdeal came into existence in 2010, as a daily deal platform. Snapdeal was the first established online player in India to shift to the marketplace model, a format in which a company hosts traders on its website to sell products, in 2012. The company raised around $133.7 million in a Series F funding round from Saama Capital, eBay, Nexus Venture Partners, Kalaari Capital, Intel Capital and Bessemer Venture Partners, in February. Then in May, the online marketplace raised around $100 million from Tybourne, PremjiInvest, Myriad, BlackRock and Temasek Holdings. Tata Sons Chairman Emeritus, Ratan Tata also invested in a personal capacity in the online marketplace. Following in the footsteps of Ratan Tata, Tata Group too invested funds in Snapdeal. In October 2014, the company raised $627 million from SoftBank. The company is targeting an annual $3 billion in gross merchandise value (GMV) sales by March 2015.
Zomato – Zomato, the popular restaurant search and discovery service, raised $60 million at a post-money valuation of $~660 million in November. The round was led jointly by Info Edge (India) Limited and Vy Capital, with participation from Sequoia Capital. This took Zomato’s total funding to over $113 million. Zomato has earlier raised $53 million from Info Edge (India) Limited and Sequoia Capital over multiple rounds of funding.
Quikr -In a funding round led by Tiger Global, the online classified site Quikr raised $60 million at a valuation of $460 million, from existing investors Kinnevik, eBay, Omidyar Network, Matrix Partners India, Nokia Growth Partners and Norwest Venture Partners also participated in this funding round. In March 2014, Quikr had raised $90 million in a funding round from their exisiting investors, led by Kinnevik. Back then Quikr was valued at $250 million.
Olacabs – In October, Taxi service provider Olacabs had raised $210 million from Japan's SoftBank Corp at a valuation of nearly $1 billion.
Uber - Online Taxi-hailing service Uber raised $1.2 billion in another funding round that now brings the company’s valuation to $40 billion. This fresh round of funding would be used for expansion in Asia Pacific region.
Top start ups in India
Furniture e-tailer Urbanladder closed $21 million in Series B funding from Steadview Capital along with the existing investors, SAIF Partners and Kalaari Capital, in January this year.
Online baby care portal Firstcry received $15 million funding from Vertex Venture Management, a subsidiary of Singapore’s state run investment company Temasek Holdings.
In March 2014, Jewellery and accessories e-tailer BlueStone had raised an investment of $10 million. This round of funding was led by venture capital firm Kalaari Capital and existing investors including Accel Partners and Saama Capital also participated. Ratan Tata has also made a personal investment in Bluestone. In May, Furniture and home products marketplace Pepperfry raised $15 million funding led by Bertelsmann India Investments (BII), including Norwest Venture Partners (NVP).
In September, FreeCharge, online platform for recharge, utility payments, promotions and couponing, raised $33 million in Series B funding from Sequoia Capital, Sofina and RuNet.
In December, Amazon has led a $10-million funding round in gift card technology and retail firm QwikCilver Solutions for a stake believed to be just under 15%. Existing investors Helion Venture Partners and Accel Partners also participated in the fund raiser.
Major acquisitions in 2014
Myntra - In May, Flipkart had acquired the online fashion store Myntra and had stated plans of investing upward of $100 million into Myntra in the near future. Post acquisition, Myntra CEO Mukesh Bansal had joined Flipkart board and is now heading Flipkart’s fashion business. In February, Myntra had raised $50 Million in a financing round led by Premji Invest along with new and existing investors. Meanwhile, rival Amazon inches closer to acquiring Rocket Internet backed Jabong.com.
Zomato - Online restaurant search and discovery service Zomato acquired Italy's leading online and mobile restaurant search service Cibando, making it Zomato's fifth acquisition this year. Zomato acquired MenuMania in New Zealand, Lunchtime in Czech Republic, Obedovat in Slovakia, and Gastronauci in Poland in the past months.
Snapdeal – The online marketplace acquired fashion products discovery site Doozton in April and then announced the acquisition of Wishpicker.com, a rapidly growing technology platform that offers users gift options based on intelligent recommendations, in December.
News Corp - In December, Media mogul Rupert Murdoch's News Corp acquired the start-up Bigdecisions.com.
Yahoo - Yahoo has acquired digital video advertising service BrightRoll for $640 million in an effort to boost its revenue.
SVG Media - Digital media network SVG Media has fully acquired mobile video technology platform SeventyNine and performance display platform NetworkPlay from Gurner+Jahr