Flipkart Raises $20 Million From Tiger Global; Financials

E-commerce major Flipkart has raised $20 million in a fresh round of funding, from existing investor Tiger Global, reports The Economic Times. This is the third funding round for the company, bringing the total amount raised by Flipkart to $31 million. Last year, it had raised $10 million from Tiger Global, and had expanded its product portfolio to offer movies, music, games, mobile handsets and electronics, in addition to books, which it had started out with.

Flipkart intends to use the funding for ramping up supply chain capacity, technology up-gradation and to expand its marketing initiatives. According to the company’s founder & CEO, Binny Bansal, the investment in technology and supply chain will give the company an edge over its competitors and help it in gaining a large market share in the Indian e-commerce space. Of recent, the company has been aggressively promoting itself on television, and claimed a healthy rise in traffic and number of purchases following the campaign.

Financials

As per filings made with India’s Registrar of Companies by Flipkart Online Services Private Limited:

– Flipkart’s income for the financial year ending 31st March 2010 was Rs. 11,61,23,238 (Rs 11.61 crore).

– It reported a loss of Rs. 91,27,283 (Rs 91.27 lakh) during the year 2009-10.

– Its total expenditure for the period was Rs 12,51,12,667 (Rs 12.51 crore).

-For the financial year 2009-10, the company purchased 2,34,934 books for Rs 8,32,56,673 and sold 2,25,847 books for Rs 10,12,53,998.

E-Commerce In India

Recently, e-commerce company IndiaPlaza had also raised $5 million from IndoUS Venture Partners. Flipkart has definitely emerged as the poster boy of the Indian e-commerce industry, competing with the likes of contemporaries like Infibeam, Letsbuy.com, and BuythePrice.com, established internet players like Rediff and Indiatimes and now the multitude of daily deals and members-only branded-ware e-stores including SnapDeal, DealsAndYou, 99labels and others.

A major cause of worry for e-commerce merchants is the dismal state of payment gateways, which prevents them from converting leads to sales. Infact, at a recent e-commerce conference, Sachin Bansal, co-founder of Flipkart admitted that Flipkart’s conversion rates were in mid-single digits. However, Flipkart has benefitted from the positive word of mouth that it has been able to garner by fulfilling service commitments, without over the top hype.

10 Comments

Jayant Dr June 22, 2011

Fake Revenue Digits:

Flipkart.com, "The Bookstore at Your Doorstep" , came up with the reality that it made a loss. I read a article last year stating that - it made a turn over of Rs. 75 crore in 2009-10 (http://www.vcbytes.com/flipkart-raises-10m-from-tiger-global/) & i realised the fact that really Flipkart did a miracle in the Online books market . But now everything is just rumour being spread by the company to drive attention And also its theory of selling "A Book a Minute" was all fake. What was the reason for this kind of discrepancy figures. Is it so that in 2010 you declared the revenue to 75 crore & then when you are filing with Indian Registrar of company showing a different figure to get rescued from the Income tax. why is it so????? Just showing the high revenue doesn't acquire customers for you. It's all about the promises & service you render to it.

Observor June 18, 2011

What I can make out from the above is FlipKart's "Turnover" was Rs. 11.61 Crs that includes value of books sold Rs.10.1 Crs and "other income" of Rs. 1.5 Cr...is that correct?

In which case the Rs. 10.1 Crs is like a tradind revenue with an associated cost of goods procured for trading at about Rs. 8Crs [assumed basis numbers provided in the article] and hence the right revenue size of Company is around Rs. 3.6 Crs; expensses aound Rs. 4.5 Crs and Loss at about 1 Cr. Is this right?

Atul June 17, 2011

Flipkart’s income for the financial year ending 31st March 2010 was Rs 11.61 croreWhat about financial year ending 31st March 2011?

Look forward to these figures

Anonymous June 17, 2011

Pvt. companies file their financials in September, so we'll have to wait till that time to report them.

Adarsh June 16, 2011

flipkart is just awesome I have used their service multiple times and have a better impression about them each time. recently I ordered a book from infibeam (becoz it wasd Rs 40 cheaper compared to flipkart) and now they say I need to wait for 20 days to get the book.

Have written to infibeam customer care to cancel my order, if they do that will order the same from flipkart and will always order from flipkart from now onwards.

Rajesh June 16, 2011

Anupam,

What do you mean by conversion rates? From cart to checkout?

Bansal Bansal June 16, 2011

yes, most of the transactions failing at the payment gateways.

Karthik June 16, 2011

Just asking - How do you tackle fraud transactions? Do u get a lot of fraud transactions or have they become insignificant after the introduction of 3D security in India?

Amit Lakhotia June 17, 2011

Failure rates aren't that high on payment gateways. IRCTC's data shows that success rate on PG's on CC is about 65%. Success rates for multiple retries would be in range of 75-80% for a transaction.

conversion numbers would be taken from landing page to the order confirmation page.

Might be useful to figure why they are failing at that stage? Is it that customer's are jsut 'browsers' not 'purchasers'? This would be akin to the mall behaviour where 1000's vsit, 100's evalaute products, but hardly 10 people end up buying. Don't think they hold 'payment modes' responsible for those levels of conversion :-)

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