India’s largest e-commerce company, Flipkart has finally raised USD 1 billion from Microsoft and China’s Tencents after months of anxious tries to raise funds to fuel growth. The company is also in talks to raise another USD 1 billion, said reports.
The course of the e-commerce battle in India, where Amazon and Alibaba have been making strides might be changed with the Flipkart’s fresh capital infusion.
As the company found itself wavering between management changes and warding off competition and raising capital, previous year has been a bit hard for Flipkart, whereas for most of the time Amazon has performed better in terms of gross merchandise value (GMV).
“The fresh round of capital will bring a lot of stability to the company,” said an executive with a venture capital firm. “It would also give Flipkart a lot of financial strength to take on Amazon – be it on discounts, new technology or marketing.”
If the another round of USD 1 billion comes in, the company’s total funding will go up to USD 5.2 billion, a little more than that of Amazon which has committed USD 5 billion to its India operations.
“This can change the fight between the two giants,” asserted a founder of a consultancy firm. “Suddenly, Flipkart, which might have been holding on to expansion plans and aggressive market share capturing, can exercise its strength.”
However, Flipkart has not made any official announcements regarding the fresh funds. But if the market reports are to be believed, then Flipkart has raised the funding at a third lower than its peak valuation of USD 15.5 billion only to make the e-commerce battle more interesting.