The largest online retailer in India, Flipkart, today announced it had raised US$210 million in a new round of venture funding. The investment round is being led by Russian billionaire Yuri Milner, through his fund DST Global.
Existing investors Tiger Global, Naspers, and Iconiq Capital also participated in this new round of funding. Other previous investors include Dragoneer Investment Group, Accel Partners, Morgan Stanley Investment Management, Sofina and Vulcan Capital.
Sachin Bansal, the co-founder and CEO of Flipkart said, “We are excited to be a part of the DST portfolio featuring companies that are leading social and ecommerce innovators. DST brings a global perspective into each of their internet investments along with a unique understanding of the businesses they invest in.”
DST Global’s founder Yuri Milner said, “Flipkart is one of the fastest growing internet companies globally led by visionary founders. It is well placed to capitalize on the significant opportunity in the fast growing Indian ecommerce market.”
Yuir Milner has been a smart early investor in leading new tech companies such as Facebook, Groupon, Zynga, Spotify and Airbnb.
Flipkart also said it has now met a target to reach a gross merchandise value run rate of US$1 billion a year before scheduled. That does not yet mean of course it has hit a figure of US$1 billion for a full twelve months period. but if it keeps growing it should soon do that too.
The just concluded parliamentary elections in India have led to an overwhelming victory for incoming Prime Minister Narendra Modi, and with an absolute majority of seats in the parliament as well.
The prospect of stable majority government seems likely to lead to a substantial boost in investor confidence in India now as a direct result, and this new Flipkart transaction seems to be an early example of that.
Just one week ago Flipkart purchased the internet fashion portal Myntra for a price that was not disclosed, but which the press estimated to be in the range of somewhere around US$330 million. This broadened its product reach, from a range of books to electronics, directly into the fashion space.
The purpose of the Myntra acquisition was to generally bulk-up Flipkart’s competitive e-commerce position, to better take on international giants such as Amazon itself. Flipkart currently employs 10, 000 people, has more than 18 million registered users, and around 3.5 million people visit its site flipkart.com every day. Amazon in the US, and Alibaba in China; now perhaps Flipkart will be the leader in India, though to get there it will continue to bleed plenty more red ink, and take deep investment pockets to stand behind it.
To date Flipkart is thought to have raised a total of US$780 million in funding since it was founded in 2007, and the company is going to have to raise even more.
Indian newspaper the Economic Times hints that further investment tranches may follow, as Flipkart tries to strike while the iron is hot.