Flipkart world’s 3rd most funded pvt co

• BENGALURU: With the $2.4 billion it just received from Japanese technology and telecom giant SoftBank, Flipkart has become the third most funded private company globally. The homegrown e-commerce company has to date raised almost $7 billion in capital, higher than that raised by global behemoths like online house rental aggregator Airbnb ($3.3 billion) and mobile phone maker Xiaomi ($1.4 billion). The top two are both ride hailing platforms — Chinabased Didi Chuxing and USbased Uber.

In April, Didi Chuxing raised $5 billion and increased its total fund raise to $15 billion, overtaking Uber that has raised $12.9 billion. In the top 10, four are ride-hailing platforms, the other two being Silicon Valley-based Lyft and India's Ola. Flipkart is the only e-commerce company in the top 10. The Flipkart funding reaffirms the faith of global players like SoftBank, Tiger Global, eBay, and Microsoft in Indian companies.

"Since Flipkart has been the flag-bearer for the local ecosystem, this reinforces the positive belief around the long-term India opportunity," said Nitin Sharma, principal and founding member at early-stage VC fund Lightbox. The VC ecosystem, he said, eventually needs to show a large-value creation event, and seeing SoftBank, Tencent and others go long should allay some of the concerns that had been dampening the sentiment locally and giving global investors some pause. He said e-commerce in India consumes a lot of capital. "With macro income growth and scale, unit economics will become attractive over five-10 years," he said.

However, K Vaitheeswaran, co-founder of India's first e-commerce company Fabmart (later IndiaPlaza), thinks more funding need not necessarily be a positive sign. "Despite the down-rounds across the startup ecosystem, the madness continues. This will run for two-three years. SoftBank has obviously given the money to Flipkart not for being prudent, but for splurging to take out Amazon," he said. He added that when aggregators are up against real technology companies, it is difficult to win by out-funding. "You have to win by outcompeting. Money will take you only till the semi-final and increases your mathematical probability," he said.

In valuation, Flipkart stands at the ninth position with about $15 billion. Uber is the most valued company at $68 billion, followed by Didi Chuxing at $50 billion, and Xiaomi at $46 billion. Sharma said the valuation of a company is a function of a lot of things. "Businesses that have more capital efficiency than others are valued more," he said.

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