Today, Flipkart confirmed that they have raised the largest funding round of $210 million led by the Russian investment firm DST Global. This takes the total funds raised well above the $700 million mark.
When Sachin Bansal, Co-founder of Flipkart, stated a week ago that Flipkart had sufficient funds in its reserve, what could have justified this announcement? Though Flipkart-Myntra deal will go down as one of the worst kept secrets in the Indian startup ecosystem, the $210 million funding round was certainly kept under wraps successfully and came as a surprise.
There is already a deluge of opinions on the Flipkart-Myntra acquisition from the VCs and other industry influencers. With this news pouring in, there’ll definitely be much more to hear from them.
But for now, YourStory spoke to Sachin Bansal himself, the co-founder of India’s largest e-commerce company.
Binny Bansal (the other Co-Founder) and Sachin have both been in media as much as Flipkart, if not less. They have handled and lived up to the tag of poster boys of the Indian startup ecosystem quite well.
Here’s what Sachin had to say about the latest deal between Flipkart and DST Global:
YS: When it was clearly stated at Myntra’s acquisition that Flipkart has sufficient funds, what was the primary reason to go for this round? What do you plan to do with this $200 million?
Sachin: 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 for supporting operating cash burn. We will continue to invest in our existing businesses and take bigger bets internally while looking at external opportunities.
YS: What role will Yuri Milner play in the future of the company? What does DST Global bring on the board of Flipkart?
Among all the investors we know in the world, DST is one of the best in their technology focus. They have a great network of founders and companies with whom we hope to interact. They also bring a global perspective into each of their Internet and technology investments. We hope to get access to a lot of global best practices going forward.
YS: Are you looking to acquire startups? If yes, then which sector and what kind of products would you be looking at?
Sachin: We are always in talks with companies – looking for organizations, teams and businesses that are a great fit with Flipkart. We look at companies that have solved unique problems, or teams that we want on board at Flipkart. Our past acquisitions, including having someone like Mukesh on our board, are a reflection of that.
YS: Flipkart is currently a 10,000 member strong team, with 3000 sellers on its platform and delivering 5 million shipments per month. How aggressively are you going to focus on hiring, increasing sellers and shipments in the near future?
Sachin: We have a lot of ambitious plans for Flipkart. We have been getting sellers on our marketplace and training them extensively to get them e-commerce ready. We plan to have 10-12000 sellers on our platform by early next year.
Hiring of course is going to be aggressive going forward. With our plans to scale up, our talent needs are going to be extensive. With the Myntra team coming on board, our team strength has already gone up.
In joining hands with Myntra we are already at 50% of the organized lifestyle market in India. Over the next few months we expect this to reach 70% and we expect our customer base and shipments to go up accordingly.
YS: Have you already taken the Alibaba way (as mentioned in last press conference)?
Sachin: We do look at Alibaba as an ideal model. The Indian and Chinese markets are remarkably similar in terms of the ecosystem and customer behaviour. Alibaba has solved admirably for that environment. They have not only built an e-commerce company, but an entire ecosystem.
At Flipkart, we are already focusing on a similar growth story – from our payments gateway, PayZippy, to our extensive dedicated supply-chain network and the number of initiatives we are taking in enabling the SMEs of India.
There’s a lot more to the Flipkart story and the recent news justifies this speculation. Flipkart has truly inspired many young entrepreneurs to stay focused. And if they’re in sync with Flipkart, they may get lucky as well, and get acquired.
Watch this space for more updates on Flipkart and do comment below your opinions and queries about the deal.