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.
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.