The Southwood Group have been following the growth of Indian E-retailers, Flipkart, after a $300 million investment puts them forward as serious competitors to the American household name, Amazon.
Flipkart, the Bangalore based online shopping company, have secured over $300 million in investment, both through existing and new investors, leaving the company valued at over $1.5 billion. Of the received funds, a $200 million investment was injected by a group of companies that hold a stake in the Indian e-commerce venture due to Flipkart’s progress. Additional $100 million investment generated by outside speculators made this the single largest funding received for an Indian start-up company to date, giving confidence to online retailers and Indian corporations.
“The newly appointed online giant has managed to move itself into all the key areas required for a successful e-commerce venture, giving itself the scope and range needed to be able to be able to compete with more well established online retailers, such as Amazon,” said Senior Vice President of Mergers and Acquisitions James Morgan at The Southwood Group.
Market analysts are following the progress of the Indian online company, noting several factors that suggest that this E-commerce venture has the capabilities to overtake Amazon as the world’s largest online retailers. This current investment marks the fifth round of financial backing for the major shareholders, with them buying into the company more substantially as Flipkart’s sales figures have risen exponentially year after year. Since 2010, Flipkart has acquired a number of companies, including India’s second largest online electronics supplier, as well as purchasing the rights to a major media network’s entire digital library.
The latest round of investments has been assigned to improving the company’s logistical capabilities, upgrade technology to keep up with the rapidly growing number of daily transactions. Flipkart’s annual Gross Merchandise Value (GMV) is currently over $500 million and is on target to reach over $1 billion annually by 2015. Uncertainty loomed as to whether an Indian based E-retailer would be feasible, but the company’s continued success, and the security that goes with such large investments, has put this start-up company in a position where they are now major competitors in the online sales arena.
“Flipkart now stands ahead as one of the largest players in this line of E-commerce, we are monitoring their progress as online purchases become the norm for shoppers worldwide, this market is growing rapidly as an expanding company we are looking closely at upcoming possible acquisitions,” concluded Senior Vice President of Mergers and Acquisitions James Morgan at The Southwood Group.
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