Most American are familiar with Amazon.com and eBay, but many have not heard of Flipkart. Flipkart is the leader of e-commerce in the fast growing Indian market. The company focuses on goods such as electronics, books, music and movies. Consumers can access the site online or through an app on their mobile phones.
While the economy of India is still much smaller than the US, it has over 1.1 billion people and is growing at a rapid 7% clip. Hundreds of millions of Indians access the internet through desktop computers and mobile devices. The company was founded in 2007 by Sachin Bansal and Binny Bansal to take advantage of this opportunity.
In this environment, the Bangalore based company has achieved tremendous success. Flipkart now has over 20 million products in 70 categories sourced from all over the world. It has over 20,000 employees, 26 million registered users and over 8 million website visits per day. The company is by far the largest e-commerce firm in India and one of the largest websites in the country as well. As a private company, the complete financial information is not available.
As it grows, the company has achieve tremendous success in raising investment funds as well. In December 2014, the company raised its Series H venture financing (Series H indicates that it is the 8th funding round) valued at $700 million dollars. The company received funding from some of the largest and most prominent investors in the world including T. Rowe Price and the Qatar sovereign wealth fund among others. Over its history, the company has also received funding from prominent names including Tiger Global Management, Morgan Stanley and others. In total, the company has raised well over $2 billion in pre-IPO venture financing, making it one of the most successful companies every in that category.
The company requires so much capital for several reasons. Firstly, e-commerce is a low-margin business which means that the company is probably not profitable. It must raise venture capital in order to keep the lights on and pay all its employees. Secondly, the company must constantly invest in new distribution, goods and marketing to increase its market share and prepare for future growth. Lastly, Amazon is investing $2 billion to compete with the company in India.
Overall, Flipkart is an interesting and rapidly growing company that will most likely become even more prominent in the future.