Mumbai, July 29: Flipkart, India’s largest e-tailer, has raised fresh funds worth $1 billion as it ramps up operations to fend off competition from Amazon, which is growing at a scorching pace in the country.
Flipkart, founded in 2007 by two former Amazon employees, had raised $760 million since its launch and the latest round of funding — the largest for an Indian e-tailer — values the company around $6-7 billion.
Singapore sovereign wealth fund GIC participated in the fund-raiser along with two existing investors — Tiger Global Management LLC and the South African media company Naspers Ltd.
Accel Partners, DST Global, ICONIQ Capital, Morgan Stanley Investment Management and Sofina also participated in the current round of funding, the company said.
Founded by Sachin Bansal and Binny Bansal, Flipkart is popular for selling books and electronics online.
The company operates as a marketplace that allows third-party vendors to sell products on the site.
Speaking to reporters in Bangalore today, co-founder and CEO Sachin Bansal said the company will use the proceeds to expand online and mobile services, focus on R&D and enhance customer base.
Flipkart is also scouting for acquisitions. Earlier this year, Flipkart acquired fashion portal Myntra and crossed $1 billion in gross merchandise value.
“The funds will be used to make long-term strategic investments in India, especially in mobile technology. It will enable us to step up our investments for innovations in products and technologies, setting us up to become the mobile e-commerce company of the future,” he added.
Commenting on the company’s IPO plans, Bansal said this was not on the cards for now.
“IPO is not in consideration at all, we are not thinking about it. We have not settled on a business model that we can take public,” he said.
Amazon, which entered India last June, has taken on rivals by slashing prices, launching next-day delivery, adding new product categories and embarking on a high-voltage advertisement campaign.
The companies vying for a bigger slice of the Indian online retail market include Flipkart, New Delhi-based marketplace Snapdeal, fashion e-tailer Jabong, and global giants Amazon and eBay Inc.
The Indian e-commerce market was worth $13 billion in 2013, with online travel accounting for over 70 per cent of consumer e-commerce transactions. Online sales of retail goods totalled $1.6 billion in 2013, according to research firm Forrester, and are expected to reach $76 billion by 2021, Technopak said.
By comparison, China’s business and consumer e-commerce sales may surpass $180 billion this year, with industry leader Alibaba readying an initial public offering (IPO) in the United States.