E-commerce enterprise Flipkart has confirmed raising INR4,625 crore ($700 million) in a fresh round of funding which has bolstered its valuation to a mammoth amount of INR98,800 crore ($15.2 billion). Flipkart, which is reportedly planning to bring its IPO, has roped in Steadview Capital, Qatar Investment Authority, Baillie Gifford, T. Rowe Price Associates and Greenoaks Capital among investors in the latest round which concluded in July. This is the first time Flipkart has disclosed its valuation.
Bengaluru-based Flipkart’s co-founders Sachin Bansal and Binny Bansal collectively hold about 17% stake and are worth more than $1billion. Flipkart has had over ten funding rounds with collection of around INR20,000 crore ($3.15 billion). Recently, its rival Snapdeal also raised $500 million from investors including SoftBank, Alibaba and Foxconn.
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Tough race to supremacy in e-commerce
Flipkart is dashing for dominance over Snapdeal in terms of gross merchandise volume (GMV). GMV is the metric used in online commerce and indicates total sales experienced over a particular period of time. Snapdeal’s parent company Jasper Infotech’s valuation is estimated to be around $5 billion. In an attempt to have an upper hand in pre-Diwali transactions, Snapdeal is vying for capturing the market by launching Preview Monday Sale. Both titans are competing to cross the $10-12 billion GMV target.
Kunal Bahl, Snapdeal co-founder and chief executive had remarked about outperforming Flipkart by FY2016. Flipkart’s GMV was $4 billion with target of $10-12 billion by March next year. Snapdeal too had the same figure for the month of August and it targets to surpass Flipkart’s target.
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‘Inorganic’ is the way
With the organic growth route largely explored by several players, e-commerce players have resorted to acquisitions and consolidation now in order to gain advantage over others. Flipkart has not been behind in this trend as its recent acquisitions of Myntra.com, AdiQuity and Appiterate indicate. The company has also secured majority stake for in FX Mart for INR45.4 crore to enable the e-seller offer digital wallet services on its app.