The funding was co-led by existing investors Tiger Global Management and Naspers. What is critical to note is that Singapore’s sovereign wealth fund GIC has joined the list of investors in the company. Though what led to GIC’s interest in the Indian brand and whether Flipkart will expand to the city-state in the near future and become competition to the local players, has not been revealed, this development throws open a plethora of possibilities that can possibly take shape in Singapore.
“This new funding 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. This funding will help us further accelerate momentum and build our presence to become a technology powerhouse,” said Sachin Bansal, Co-Founder, Flipkart.
In a conference call, Bansal further added that this investment will enable the company to think long-term and shape the e-commerce ecosystem in India. “This funding will allow us to think on strategically and take big bets,” he stated.
The company will continue to look for companies to partner or acquire. The areas that Flipkart will look at are wearable technologies, robotics, mobile internet, fashion, etc. “We are going to be very broad-minded in our acquisitions,” said Bansal.
When asked the looming IPO question, Bansal said that the company is not thinking of an IPO at all. He reasoned that the nature of the game has changed in the last few years. Private investors have long-term appetite. They are very patient from a holding point of view. It is no longer about investing before an IPO and exiting.
“When we are ready, the market is ready and our business model is not evolving anymore, we will then think of an IPO. It could take two years or 10 years,” said Bansal.
Flipkart just raised US$210 million in May. At that time it said it was not looking for more funds, and then comes this announcement. “We didn’t have to raise. The option of raising opened up, so we took a calculated decision,” said Bansal. The question here is whether the funds have been raised to beat competition, especially the burgeoning presence of Amazon in India.
The e-commerce giant plans to hire more than 1000 engineers. It already has started looking at premier technology institutes such as Indian Institute of Technology.
Flipkart is also in talks with talent in the Valley that it wants to get on board. Earlier internet companies were not big enough but now a lot of Indians in the Valley are looking to come back, said Bansal.
This new milestone comes within months of Flipkart becoming the first e-commerce company out of India to hit US$1 billion in GMV.
The funds will be used to make long-term strategic investments in India, especially in mobile technology. Flipkart will continue to ramp up its focus on fashion through recently acquired Myntra. It will also invest in training sellers for the marketplace, providing all small and medium entrepreneurs, manufacturers and artisans a national platform to connect with millions of customers, said an official note.
Flipkart’s founders Sachin Bansal and Binny Bansal spoke about the funding in an official press note, “We have close to 22 million registered users today. We handle five million shipments a month. These numbers were unheard of a few years back and we are excited about the scale we have managed to achieve. But what is even more exciting is the huge opportunity that we still see before us.”
It further added, “India has 243 million internet users – and this number continues to grow very fast. We want to enable every Indian to either shop or sell online. And we believe that the power of the mobile internet is going to help us achieve this goal. By 2020, India will have more than half a billion mobile internet users. Our intense focus on mobile and technology puts us in a unique position to take advantage of this massive opportunity.”
Launched in 2007 by two Amazon ex-employees in just a mere Rs 4 lakh (US$6600), Flipkart has seen nothing short of a phenomenal growth. According to the company, it is currently 14000 people strong, has 22 million registered users clocking over four million daily visits.