When top online retailer Flipkart raised $200 million in July, it was asked a pertinent question: Why did the company go to its existing investors rather than new ones? While Flipkart pointed out that the move showed confidence of the current investors in the company’s future, rivals and analysts argued it was a decision made due to lack of options. “Existing investors were finding it tough to exit, so they decided to re-invest.” Three months down the line when Flipkart went to the market again to raise $160 million, it faced a new question: “Why does it need funds so soon?”
To that, Sachin Bansal, chief executive and co-founder of the company, says the money had to be raised for “technology and supply-chain expansion to reach more and more people”, adding that these are long-term goals. The company has notched up a total of $540 million in funds over the last six years, $360 million of which has flowed in two tranches this year itself.
More at Business Standard
