Flipkart, India’s largest online retailer founded by two former Amazon executives, just raised $US1 billion in its latest round of funding, according to The Wall Street Journal.
Singapore sovereign-wealth fund GIC joined existing investors including Tiger Global Management LLC, Accel Partners, and Morgan Stanley Investment Management for today’s round of funding.
Flipkart is an online marketplace that was founded in 2007. It’s where third-party vendors sell products, ranging from books and clothing to electronics. Much like Amazon Marketplace and China’s Alibaba, Flipkart makes money off the transaction fee on products sold on its website.
More than 22 million registered users and 3,000 merchants currently use the Flipkart marketplace, according to The Wall Street Journal. More than $US1 billion worth of products have been sold on the site over the last 12 months, it said.
Today’s funding is the largest in Indian online commerce history and the second-largest single-round of funding globally, after the $US1.2 billion raised by Uber last month, according to Quartz. It said the company was valued at around $US5 billion.
The company said it will spend most of today’s funding to boost its mobile offerings, which includes, much like Amazon, its own line of smartphones.
“We believe that India can produce a $US100 billion Internet company in the next five years and we want to be that company,” Flipkart’s cofounder and CEO Sachin Bansal told The Wall Street Journal.
The Indian online retail sector has been growing at a rapid pace recently. It is estimated to be over $US3 billion this year, but is projected to reach a value of $US50 billion by 2020, according to a report by Wharton Digital Press. Local e-commerce stores like Flipkart and Snapdeal are in direct competition with newcomers Amazon and eBay for a bigger marketshare.
Amazon launched its online marketplace in India last year. According to Wharton, Amazon currently has 5,000 merchants selling over 15 million products, grossing over $US200 million in sales.
Prior to today’s round, Flipkart had raised $US760 million in total, including a $US210 million funding from earlier this year. Although an IPO seems like the natural next step for Flipkart, Bansal, the company’s CEO, told the WSJ that they’re not planning to go public for at least the next 5 to 10 years.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.