Home/Ecommerce News/Flipkart Becomes The World’s…

Thanks to the $2.4 billion that it recently received from the leading Japanese technology investor SoftBank, the leading Indian ecommerce has become the third most funded private company in the world. The two most funded global firms are both ride hailing platforms, US-based Uber and the Chinese company Didi Chuxing.

To date, the Indian e commerce platform has raised a total of almost $7 billion in capital, more than global giants such as the Chinese mobile phone maker Xiaomi and the online house and room rental aggregator Airbnb. These companies have received $1.4 billion and $3.3 billion respectively. In a prepared statement about the recent investment from SoftBank, Binny Bansal and Sachin Bansal spelled out what this means for Flipkart.

“This is a monumental deal for Flipkart and India. Very few economies globally attract such overwhelming interest from top-tier investors. It is recognition of India’s unparalleled potential to become a leader in technology and e-commerce on a massive scale. SoftBank’s proven track record of partnering with transformative technology leaders has earned it the reputation of being a visionary investor. We’re excited to welcome the Vision Fund as a long-term partner as we continue to build our business with a focus on serving the needs of all Indians, and driving the next phase of technology adoption in India.”

In the top 10 of the world’s most funded companies, Flipkart is the only ecommerce firm which means that they are now in the position to up the ante in the high stakes battle with Amazon India in what is widely regarded as the world’s fasting growing ecommerce market. Amazon’s Jeff Bezos has committed approximately $5 billion to the Indian arm of his business, Flipkart now have $4 billion to play with thanks to the injection of $2.5 billion from SoftBank. The other $1.5 billion comes from an investment in Flipkart in April by Tencent, eBay and Microsoft. The funding for both Amazon and Flipkart will be used to try and attract more sellers and buyers to their sites as well as improving infrastructure.

However some commentators see these huge investments as not necessarily being a positive sign. K Vaitheeswaran, co-founder of India’s first ecommerce company Fabmart (later IndiaPlaza) says:

“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.

When aggregators are up against real technology companies, he says,  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.

Scott Bretton
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