It's raining funds on Indian e-commerce companies, at least the major ones. Days after Snapdeal raised $100 million, its cross-country rival, Flipkart, on Monday announced it has raised $210 million in a fresh round of funding from investors led by DST Global, which had earlier invested in Facebook, Twitter, Zynga and Groupon. DST Global has picked up a stake in Flipkart, which has already raised over $600 million since its inception in 2007. Existing investors like Tiger Global, Naspers and Iconiq Capital also participated in this round. In an interaction with the media on Monday, Flipkart co-founder Sachin Bansal spoke about the rationale behind the latest round of funding and plans on acquisitions and capacity building. Edited excerpts:
Could you give us some details about the latest round of funding?
We have raised $210 million from investors led by DST Global. We are excited to have them on board because among all the investors we know, DST Global is the best in technology focus. Most of the work they have done is in the internet and technology space. Yuri Milner, who heads DST, is a great visionary and has a network of founders across the globe. We hope to learn from his network and thus get to talk to more people. It is a vote of confidence also, as DST Global is one of the world’s most respected funds.
Why did you need to raise more funds?
In this case, funding was secondary and an association with Yuri and DST was more important. We can use the funds to grow further and invest in supply chain and technology.
Will e-commerce companies continue to require large amount of funds every year?
E-commerce is a capital intensive business and India is showing a lot of promise. If you take the US and China out, India is going to be the third biggest e-commerce country, taking into consideration Brazil, Russia, South Africa or West Asia. If you look at US and China's e-commerce markets, the kind of funds they raised were in a similar range. If you want to build a large business, capital is required. But, our absolute cash burn has come down over the years. It's coming down pretty fast. Besides, raising funds and having money in the bank also gives you flexibility to take decisions so that when opportunities come, we are able to take decisions.
Will Flipkart go the IPO way now?
None of our