The round includes money from existing investors DST Global, GIC, ICONIQ Capital and Tiger Global, and new backers Baillie Gifford, Greenoaks Capital, Steadview Capital, T. Rowe PriceAssociates and Qatar Investment Authority.
Added to the $210 million that it closed in May, this round takes seven-year-old Flipkart past $2 billion in investor money in 2014, and to around $2.7 billion in total.
Interestingly, the company has disclosed that it has applied to become a public company in Singapore, where it is registered. It stressed that this filing is in line with the law since it now has over 50 shareholders and that it “is in no way indicative of any upcoming IPO,” but it does raise the question of what (and when) its exit will be.
Flipkart has over 14,000 staff and sees more than 8 million daily visits from 26 million-plus registered users. It said the new funding will be spent on “long-term strategic investments in India” and on developing its technology and customer service. This year it acquired fashion-focused rival Myntra, and it looks like it open to snapping up other complementary services to guild its competitive edge against fierce rivals Amazon India and Snapdeal.
Amazon finally launched its service in India in 2013, but this year it really put its foot on the gas. In addition to investing $2 billion in its local operations (just a day after Flipkart announced its $1 billion raise), the company snapped up a number of exclusive sales deals including Chinese phone company OnePlus. (A company that has since run into issues in India.)
Snapdeal, which counts eBay as a shareholder, raised its own mega round this year when SoftBank led a $627 million round that closed in October.
Retail in emerging markets is a capital intensive business, just ask Rocket Internet which has poured billions into a range of businesses worldwide. The bet is that this money will reap dividends as smartphone adoption increases and consumers in countries like India begin embracing e-commerce, mobile commerce and more as we’ve seen in China — which has made Alibaba into a global giant.
With a clutch of well-funded rivals and the price competition that comes with it, Flipkart and others are taking in money to keep afloat and stay ahead of the competition. As is the case with the country’s taxi-booking industry, 2015 is shaping up to a pivotal year for e-commerce in India, particularly now that Flipkart has replenished its war chest.