Barely three days after the country’s largest e-tailer Flipkart announced that it has acquired fashion and lifestyle e-tailer Myntra, the Company said it has raised $210 million led by DST Global, one of the leading global investment groups focused on the Internet.
DST Global has been founded by Russian entrepreneur and venture capitalist, Yuri Milner. Flipkart’s existing investors Tiger Global, Naspers and Iconiq Capital also participated in the financing round.
With this, the total amount of fund raised by the online marketplace is pegged at $750 million (Rs 9,000 crore) since its inception in 2007. The company is already being valued at $2 billion post the Myntra acquisition.
Sachin Bansal, co-founder and CEO of Flipkart who had categorically stated three days ago, that they were in no hurry to raise more funding as they still had a significant amount of the $360 million that was raised in two tranches last year, said “We were not actively looking for funding. This round of investment is less about funding and more about our association with Yuri who heads DST and is a visionary with a great network of tech founders across the globe.”
He has the ability to spot promising companies and invest in them. He was one of the first to spot Facebook and invest in it. It is a privilege for us to be working with DST which brings a global perspective into each of their Internet investments along with a unique understanding of the businesses they invest in. We look forward to learning from Yuri.” DST has also invested in group buying site Groupon and social gaming site Zynga .
Citing examples of Chinese e-commerce giants JD.com and Alibaba.com, both of which raised over $1 billion in funding in their early years, Sachin said, “e-commerce is a capital intensive business which is always in need of money and this new round of funding will increase our flexibility to take decisions to expand much faster, acquire companies and grow the business faster. We are actively looking to acquire e-commerce companies, firms that specialise in supply chain, payments, seller development and reverse logistics.”
On being queried whether the new round of funding will spur him on to take the company public, Sachin said, “Today, the trend is to stay private for much longer because private money is more readily available. We have enough cash in our kitty to relax and not worry about going public.”
Flipkart had announced its intention to invest $100 million in the Fashion category over the next 12-18 months in order to dominate market share in that category. The company continues to invest in e-books, electronics and media. The new round of funding will be directed to capex investments such as, expansion of the supply chain and setting up new data centres.
The company will also continue to invest in warehouses and logistics to facilitate the 3,000 sellers on its platforms to do more business. Flipkart offers over 15 million products across 70 categories to its 18 million registered users and 3.5 million daily visitors. Its technology enables 5 million shipments per month.