Let's start with the company's statement first.
Flipkart, India's largest e-commerce marketplace, today announced a US $ 700 million investment with new investors: Baillie Gifford, Greenoaks Capital, Steadview Capital, T. Rowe Price Associates and Qatar Investment Authority, along with existing investors: DST Global, GIC, ICONIQ Capital and Tiger Global, who also participated in this latest financing round. As with previous funds raised, these funds will be used towards long-term strategic investments in India and to build a world-class technology company, delivering superior customer experiences.
Flipkart Limited (incorporated at Singapore) has filed with ACRA Singapore for conversion to a Public Company. This is a mandatory procedure for all companies where the number of shareholders exceeds 50.
This filing ensures we are in compliance with the laws of Singapore and is in no way indicative of any upcoming IPO or of any corporate activity that the company is engaged in either in Singapore or any other part of the world.
Flipkart in another round of funding has raised a $700 million in funding. This time old investors like DST Global, GIC, ICONIQ Capital and Tiger Global also participated but Qatar Investment Authority was the leaper in the race with a whooping $150 million. Raising the company valuation to $11 Billion.
The emerging market of Indian ecommerce has shown a significant interest of shareholders like Greenoaks Capital, Steadview Capital and T Rowe PriceAssociates etc which participated in this latest financing round.
Flipkart is projecting a revenue of $4 Billion in the coming year and hence is focusing to gain a upperhand with investments. Snapdeal recently gained approximate. $650 million from Softbank which have raised the value Snapdeal to $2 billion.
In the statement issued by the company, Flipkart has filed with ACRA Singapore for conversion to a public company. (Singapore Law states that it is mandatory to go public after having 50+ members of shareholders)
To maintain the trust of all, the company released an statement claiming,
“This filing ensures we are in compliance with the laws of Singapore and is in no way indicative of any upcoming IPO or of any corporate activity that the company is engaged in either in Singapore or any other part of the world.”
The Benefits of the funding
The funding is to give the company an upper hand over its competitors like Amazon, Snapdeal etc. It is also an act of display of confidence of investors in ecommerce market in India, making Flipkart as the focal point. It has also raised interest of world in the Indian ecommerce market. Also Flipkart may introduce this money in upgrading its technical branch so as to handle problems like "Big Billion Day technical Glitch".
Ramifications of this funding*
The funding has increased the valuation of the company, however it could be termed as a management hubris as functionality of the major decision of the company would now be goverened by the shareholders. The point I am trying to make here is that Mr. Bansal's decisions have made a strong company named as Flipkart through him & his team's decisions which will now be governed a bit in favor of the investors.
Anyways, its brilliant to see a startup to grow so quickly.
Stay Sharp and Shop Smart.