Page 29 - IACC Newsletter March-April 2014 Issue 03

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US investments in India
E-tailer Flipkart in talks to raise $500 million for likely US listing next year; GIC &
T Rowe Price keen on investing
Flipkart is in negotiations to raise at least $500 million, or about Rs 3,000 crore, an investment round that will prepare
the ground for a likely listing in the US next year, according to several people aware of the development. These sources,
who are not directly involved in the process, said a fund founded by Russian billionaire Yuri Milner is taking the lead
drawing in new investors soon after pouring money itself into the Bangalore-based company.
Flipkart's Valuation has Doubled Since May
Among those said to be interested are Singapore's sovereign wealth fund GIC and US-based investment firm T Rowe
Price. Flipkart declined comment on what it called "market speculation". GIC and T Rowe Price did not reply to questions
sent by email. This round of funding, when it fructifies, could see the Bangalore-based company being valued at $5
billion (Rs 30,000 crore) at least, a near-doubling of Flipkart's valuation over the last round of funding in May.
Flipkart is the clear leader in India's online retail space but US-based Amazon has started to rapidly build scale, hotting
up the competition as well as the need for cash for the Bangalore Company. Flipkart spent an estimated $370 million in
May to buy fashion portal Myntra, and rival Snapdeal is snapping at its heels by raising its game and a lot of money —
$200 million earlier this year.
As Flipkart readies for an eventual US listing expected next year — cofounder Sachin Bansal has said Nasdaq is a definite
possibility — General Atlantic and Fidelity are also being spoken of as potential investors in the company. If all the
investments come through, Flipkart could end up raising well over $1 billion.
DST had led a $210-million (Rs 1,250 crore) funding round in May, with participation from existing investors Tiger Global,
Naspers and Iconiq Capital. Flipkart's other investors are Accel Partners, Dragoneer Investment Group, Morgan Stanley
Investment Management, Sofina and Vulcan Capital.
Seven-year-old Flipkart has so far raised $750 million (Rs 4,480 crore) in over five rounds. Price has previously invested
in DST-backed global tech companies such as Twitter, Groupon, Zynga and Facebook before their initial public offerings.
In May, GIC led a $170-million (Rs 1,000 crore) funding round in Brazilian sports goods e-tailer Netshoes, along with
investors like Tiger Global Management and Iconiq Capital.
The latter are existing investors in Flipkart. Since 2013, top global investors have competed to pump money into India's
online retail industry, which advisory Technopak estimates will expand from the current $2.3 billion to $32 billion (from
Rs 13,700 crore to Rs 1.9 lakh crore) in six years.