The mega online retail store, FlipKart is in news for raising a whopping $200 million, i.e. 1,200 Crore from its existing investors. According to the sources, this is the single largest Indian e-commerce space round of investment.
Revealed by the sources familiar with the latest development, FlipKart is valued at $1.5 billion by the investors.
The investors for the company has generated after almost 5 rounds of funding, a massive turn over of more than $380 million. Previously the investors, the South African Internet major, Naspers has bought out bus ticketing startup redBus, private equity firms Accel Partners and Tiger Global, and San Francisco-based family office Iconiq Capital.
Sachin Bansal-co-founder and the CEO of FlipKart:
According to the co-founder and the CEO of the Online retailer, Flipkart- Sachin Bansal, this investment model was an e-commerce growth story and a major validation of the FlipKart model.
He said, "There have been skeptics on Flipkart and Indian e-commerce. Today's development should put to rest these arguments,".
The massive investment and its validation received by FlipKart is an indication towards global acclamation of the interest of Indian technology startups. The other major investments are as follows:
-In 2011, SoftBank, Japan's telecom and Internet company invested $200 million in Bangalore-based ad network Inmobi.
-Naspers invested in redBus an estimated amount of $120 million last month.
-In 2011, $108 million were invested on analytical services firm Mu Sigma by a consortium led by General Atlantic.
Future plans of company turnover:
Currently the total amount generated by FlipKart considering it annualised run rate is over $500 million, however according to the company co-founder and the CEO, Sachin Bansal they will soon hit the $1 billion mark by 2015.
He also confirmed that the company is not able to make profits only with the massive investments it has been making, the company would still be profitable if the huge investments were stopped.
He said, "We can be profitable if we stop investing. But we want to be market leaders in a number of categories, and the market is almost doubling every year, so it's a strategic decision to invest. Binny (Binny Bansal, the other co-founder) and I are thinking very, very long term,"
When asked how could the money generated through profits be used, Sachin Bansal suggested that they would be used for developing emerging talent, improving the current supply chain and also investing on technology.
He added, "One day last month we shipped 1.3 lakh items. That's 1.5 items a second, or, if you look only at daytime, about 4-5 items a second. In a few years, this will become several million shipments a day. The only way to handle that kind of volume is through automation, and that will require a lot of investment,".
With the growing popularity of the Online retail store which originally started with selling of best seller books has now laid its hands on numerous other products too which include electronics, apparel, watches, cameras, footwear, beauty & personal care, baby care and many many others.
The company has seen a drastic increase in the number of registered subscribers from just about 2.5 Lakhs users to a massive 96 Lakhs within a span of two and a half years.