Flipkart to Grow with Considerations to Costs: Co-founder Binny Bansal
The funding announcement comes in the wake of Flipkart, being in the eye of a storm in recent times for lowering of valuation.
Image for representation. (Photo: Reuters)
Flipkart co-founder Binny Bansal has said while the latest funding round provides the fuel the company needs to reach its goal of transforming commerce in India through technology, it should continue to grow its business with careful considerations to costs.
"I must stress that we still have some distance to go before fulfilling our mission - to transform commerce in India through technology. And, while this funding round provides the fuel we need need to reach that goal, we have to continue growing our business with careful considerations to costs," he said in a mail shot-off to his employees after raising $1.4 billion from Tencent Holdings, Microsoft and eBay.
"I look forward to your continued support," he added.
The funding announcement comes in the wake of Flipkart, being in the eye of a storm in recent times for lowering of valuation, which prompted them to make several changes in its business model, including raising margins, it charges from sellers.
A host of Flipkart's investors had marked down their valuation estimates by up to 39% in the recent past. At its peak, Flipkart was valued at over $15 billion (roughly Rs 1,00,830 crore).
Giving reasons for the significance of the latest funding, Binny Bansal said it is the largest in the company's 10-year history and also in India's internet sector.
Bansal also said it provides solid growth capital so that the company can cement and extend its lead in India's e-commerce market, and its valuation remains healthy and in double-digits, reflective of the current business and global economy.
"I am particularly excited from the strong confidence global tech giants have shown in our abilities. It is just an acknowledgement of the strides we have taken in improving people's lives, it is also an endorsement of the opportunities ahead," he said.
Bansal said the deals that the company has struck are important for them as e-commerce space accounts for less than two per cent of all retail in India and the potential for online retail alone is about $100 billion.
"As I have said before, the potential is vast and we have only just scratched the surface. E-commerce accounts for less than two per cent of all retail in India and the potential for online retail alone is about $100 billion. Which is why these deals are particularly important for all of us," he said.
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