It’s not clear as to where the company plans to use the investment raised but it’s possible that the company will be using this investment to fund the Myntra acquisition among others. Last week, the company had mentioned that it will be investing upward of $100 million into Myntra in the near future. Post acquisition, Myntra CEO Mukesh Bansal had joined Flipkart board and was heading Flipkart’s fashion business.
Interestingly though, when Flipkart CEO Sachin Bansal was asked if the company was looking to raise any further investment following the Myntra acquisition last week, he had mentioned that the company was well-funded at the moment, having raised a significant round in October last year.
Update: Flipkart CEO Sachin Bansal has sent the following response on the company’s plans with this investment:
E-commerce is a capital intensive industry. India is going to be the third biggest e-commerce market in the world and anyone who wants to build a large e-commerce company will need capital.
Raising funds and having money in the bank gives us the flexibility to take optimal decisions as and when opportunities come up. For example, if we want to expand faster, invest more aggressively in supply-chain, or if there is an acquisition opportunity – the funds should give us adequate flexibility to make the decisions we think are best for the business.
As expected, our business is getting more and more efficient as we scale – so usage of these funds will be more towards capital expenditure than about supporting operating cash burn. We will continue to invest in our existing businesses and take bigger bets internally while looking at external opportunities.
Last week, Snapdeal had raised $100 million from Temasek, BlackRock Inc., Myriad, Premji Invest and Tybourne. This was just three months after it had raised $133.7 million from eBay and other existing investors like Kalaari Capital, Nexus Venture Partners, Bessemer Venture Partners, Intel Capital and Saama Capital.
Amazon India is also aggressively rolling out more categories to its site: It had entered the apparel segment by launching women’s ethnic wear section last month and had introduced an intimate apparel store for women about a fortnight ago.
Flipkart Investment until now
– October 2013: Raised $160 million investment from Dragoneer Investment Group, Morgan Stanley Investment Management, Sofina and Vulcan Capital and existing investor Tiger Global
– July 2013: $200 million from Naspers, Accel Partners, Tiger Global, and ICONIQ Capital.
– August 2012: $150 million from Naspers and Tiger Global.
– June 2011: $20 million from Tiger Global.
– June 2010: Up to $10 million from Tiger Global.
– 2009: $1 million from Accel Partners.
Overall, the company has raised around $751 million until now, probably the highest for an Internet company in India.