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Flipkart raises $1B from Tiger Global, Naspers, Singapore’s GIC & others

30 July, 2014

India’s largest e-commerce platform Flipkart.com has raised $1 billion (around Rs 6,000 crore) in a fresh funding round co-led by two of its existing investors Tiger Global and Naspers. One of the two sovereign wealth funds of Singapore, GIC, along with other existing investors Accel Partners, DST Global, ICONIQ Capital, Morgan Stanley Investment Management and Sofina, also participated in this latest financing round.

Flipkart said in a press event on Tuesday afternoon that it would use the money for long-term strategic investments in India, especially in mobile technology.

Flipkart co-founders Sachin Bansal and Binny Bansal, who are unrelated to each other, said in a joint statement, “We have close to 22 million registered users today. We handle 5 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.”

They added that India has 243 million internet users and the firm wants 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,” they said.

“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,” according to the co-founders.

“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,” they added.

This development takes the total fundraise by Flipkart to date to around $1.75 billion, making it not just India’s but one of the single-biggest private funding rounds for a tech venture globally.

Some other large notable deals globally include Facebook’s record $1.5 billion transaction ahead of its IPO (which included a secondary component, meaning that portion went to selling shareholders and not into the company); taxi booking app Uber’s recent $1.2 billion deal which had set a new benchmark for fresh funding and Yahoo’s $1 billion deal to buy a stake in Alibaba.

Within India, the latest deal also translates into the third-biggest private equity/venture fundraise ever. The other two deals include Temasek’s $2 billion deal to buy a stake in Bharti Telecom, a private holding firm of Bharti Airtel, and Qatar Foundation’s $1.2 billion transaction last year to buy a stake in Bharti Airtel.

Although Bharti Infratel, the public listed tower arm of Bharti Airtel, had raised $1.25 billion from a group of investors including Temasek in FY08, in rupee terms it was much smaller than the latest funding of Flipkart.

Flipkart’s new fundraise comes barely two months after it announced a $210 million investment led by DST Global, a global investment firm focusing on internet with participation of existing investors Tiger Global, Naspers and Iconiq Capital. South Africa’s Naspers had brought in $52 million during this round taking its holding to $17.7 per cent.

Last year it had raised $360 million in two tranches from Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina, Vulcan Capital, and Tiger Global.

In 2012, it had raised around $150 million from Tiger Global, Naspers, Accel Partners and Iconiq Capital. Prior to that it had scooped around $32 million in multiple tranches from Accel Partners, Tiger Global besides its angel investors.

While the firm was using money raised from investors to support operational cash burn in the past it has been bulking up lately to boost capex and take bigger bets.

The company recently announced it is on course to surpass its target of $1 billion in gross merchandise value for the current financial year.

In May, Flipkart acquired Myntra Designs Pvt Ltd, the company which runs the online fashion and apparel shop Myntra.com. As part of the deal, Myntra’s co-founder and CEO Mukesh Bansal joined Flipkart’s board. He also heads its fashion vertical. However, both the entities remain independent. Flipkart is planning to invest $100 million in the fashion business alone, a high margin vertical and one of its weak points before it snapped Myntra.

Meanwhile, GIC’s investment in Flipkart is interesting as it is one of the two sovereign wealth funds of Singapore. Temasek, which is the other, recently backed Flipkart’s domestic arch rival Snapdeal.

GIC and Temasek have been among the most prominent sovereign wealth funds in the country and have been particularly bullish over backing market leaders, be it banking, telecom or other sectors in the economy.

Flipkart Pvt Ltd, the key holding arm of Flipkart, happens to be a Singapore incorporated entity.

PremjiInvest, the private investment arm of Wipro chief Azim Premji, is a common investor in both Flipkart and Snapdeal, the top two Indian e-commerce marketplaces.

Both Flipkart and Snapdeal compete with Amazon.in, the Indian marketplace launched by the world’s top e-commerce firm Amazon last year.

(Edited by Joby Puthuparampil Johnson)


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Flipkart raises $1B from Tiger Global, Naspers, Singapore’s GIC & others

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