At a time when Indian e-commerce scenario is going through troubled phase, Flipkart has taken over the rein of the market by becoming the third most funded private company in the world.
Post receiving $2.4 billion from Japanese technology and telecom giant SoftBank, Flipkart’s total raised capital is now almost $7 billion which is higher than that raised by global giants like online house rental aggregator Airbnb ($3.3 billion) and mobile phone maker Xiaomi ($1.4 billion).
Furthermore, post this achievement Flipkart is now behind only to China’s Didi Chuxing and Uber in the USA, both of which are cab hailing services. Didi Chuxing has raised 5 Bn USD and increased its total fund to $15 Bn in April. In the top 10 list of privately funded companies of the world, India’s Ola is also there.
In valuation, Flipkart stands at the 9th position with about $15 billion. Uber is the most valued company at $68 billion, followed by Didi Chuxing at $50 billion, and Xiaomi at $46 billion.
The Flipkart funding reaffirms the faith of global players like SoftBank, Tiger Global, eBay, and Microsoft in Indian companies, according to a report in The Economic Times.
“Since Flipkart has been the flag-bearer for the local ecosystem, this reinforces the positive belief around the long-term India opportunity,” Nitin Sharma, principal and founding member at early-stage VC fund Lightbox told ET. “With macro income growth and scale, unit economics will become attractive over five-10 years,” he said.
However, K Vaitheeswaran, co-founder of India’s first e-commerce company IndiaPlaza (earlier known as Fabmart), thinks more funding need not necessarily be a positive sign. “Despite the down-rounds across the startup ecosystem, the madness continues. This will run for two-three years. SoftBank has obviously given the money to Flipkart not for being prudent, but for splurging to take out Amazon,” he said. He added that when aggregators are up against real technology companies, it is difficult to win by out-funding. “You have to win by outcompeting. Money will take you only till the semi-final and increases your mathematical probability,” he said to The Times of India.
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