Singapore sovereign wealth fund GIC Pte and Russian billionaire Yuri Milner’s DST Global, also made investments, Flipkart said in a statement today. The e-commerce company said it has 22 million registered users and handles 5 million shipments a month.
Today’s investment would be the most raised in India's e-commerce industry, according to data compiled by Bloomberg. The money will provide Flipkart with additional impetus as it fights to maintain its lead against competitors such as Amazon.com Inc. (AMZN) in a market that CLSA Asia Pacific Markets projects will grow sevenfold to $22 billion by 2018.
“This funding will let us make big bets on changing the structure of the ecommerce ecosystem in India,” Chief Executive Officer Sachin Bansal told reporters in Bengaluru. “It helps us take a really long term view of where the market is headed and how we want to shape it.”
Flipkart plans to develop its infrastructure for mobile-based e-commerce, add more items to its portal and acquire companies in related areas, Bansal said.
Flipkart and Myntra.com had a combined 9 percent share of the 170 billion rupees ($2.8 billion) worth of Internet retailing transactions in India in 2013 before they merged in May, according to data from Euromonitor International published in May. Amazon had a 1.6 percent share selling everything from lingerie to smartphones, and said yesterday it was opening five new warehouses to facilitate speedier delivery across the country.
India has 243 million Internet users, Flipkart said in its statement. The company estimated the world’s second-most populous nation will have more than 500 million mobile Internet users by 2020.
Bloomberg News reported details of the investment on July 23. Bansal declined to comment on Flipkart’s shareholding structure or other financial details. The company will continue to seek private funds to expand and is not considering a public offering, he said.
Flipkart could use the funds to expand its offerings and improve delivery infrastructure in India’s small towns, said Pinakiranjan Mishra, partner at Ernst & Young in India.
Accel Partners, Morgan Stanley Investment Management, ICONIQ Capital and Sofina SA also invested in Flipkart, according to the statement.
“They have done a good job of popularizing e-commerce and building a loyal customer base,” Mishra said in a phone interview. “Now they have to find ways of making the business profitable.”
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