Flipkart raises $150m from Accel partners and Tiger Global at $850 million valuation

Securing the largest investment so far known in an Indian online space Flipkart has raised $150 million from existing investors Accel Partners and Tiger Global Management Llc, reports Live Mint. This is the fourth round of funding for Flipkart, which began operations in 2007. The company raised $31 million collectively in the previous three rounds. The company raised funds to build capabilities in logistics, technology, customer support and marketing, to scale up the business.

Earlier, Flipkart, said in a response to iamwire query on the latest plans and investment that the company is in touch with investors on a regular basis. “As far as future is concerned, we will be looking at bigger investments in our supply chain and technology. This should result in larger warehouses and increased automation of our processes. Additionally, we will also scale up our self-delivery, which currently operates in 27 cities.  We plan to enter various new categories over the coming year and are weighing different options. We look to expand our current categories as well. Everything, except for groceries and automobiles, is fair game for us,” flipkart answered to iamwire’s queries.

With 2 million customers flipkart catalogue currently consists of 12 categories – including books, music, movies and TV shows, computers and accessories, mobiles, cameras, games and consoles, audio and mp3 players, personal and health care products, home and kitchen appliances, TV and video and the newly launched stationery category. In terms of yearly revenue Flipkart’s figures are as follows:

2008-09 – Rs. 2.5 crore

2009-10 – Rs. 20 crore

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2010-11 – Rs. 50 crore

2011-12 – Rs. 500 crore (projected)

 

Iamwire take

E-commerce is in the nascent stages in India and is growing fast with increasing internet penetration. It has become a chain of functions across procurement, technology, payment and delivery. As of now, Payment and delivery section seems to be where main players are fighting for as Indian consumers prefer Cash on Delivery (COD). And there are a lot of online retailers who are trying to fulfill the demand through expanding their capabilities by raising funds. Flipkart’s fourth round of capital-raising has come at a time when a section of the investment fraternity is turning incredulous. Flipkart recent most investments are from private equity placements.

However, at the other the higher valuations may lead to competition and other funded players raising next rounds at higher valuations. For 100 plus upcoming start ups in ecommerce segment it would create competition to prove their worth to get the higher valuation.

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