To deal with increasing competition, Flipkart raises USD1 billion fund

To deal with increasing competition, Flipkart raises USD1 billion fund

Indian e-commerce company Flipkart has reportedly completed raising funds to the value of $1 billion and hopes to raise another $1 billion in the months ahead, giving it the boost to put up a fight with rival players in the sector.

The drop in Flipkart's valuation can be attributed to the intense competition it is facing against USA e-retail giant Amazon which has pumped in $5 billion dollars in the next few years.

The funds were secured at a down round that valued the company at $10 billion, the report added citing the same people. Flipkart witnessed United States dollars 15.5 billion valuation in 2015.

According to the Economic Times report, US-based online selling platform eBay is expected to invest about $400-500 million "while discussions with Chinese internet giant Tencent and the likelihood of a potential third investor joining the round are still underway". The company didn't immediately provide comment.

Late previous year, a Morgan Stanley mutual fund, revised down the Flipkart's valuation by a whopping 38 per cent to $5.54 billion, in what was its fourth markdown by the fund in nine months.

Flipkart had a tumultuous 2016. The company struggled with exits of many top-level executives and a markdown in its valuation about a dozen times.

The latest valuation resetting comes on the heels of a major organisational restructuring in the second week of January when Flipkart appointed Kalyan Krishnamurthy, a former Tiger Global executive, as its new chief executive officer and made co-founder Binny Bansal group CEO.