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‘All our investors are here for the long term, just as we wanted’

    K.Giriprakash
    K.Venkatasubramanian
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Mr Sachin Bansal, CEO, Flipkart.com. - Bijoy Ghosh
Mr Sachin Bansal, CEO, Flipkart.com. - Bijoy Ghosh

With the latest round of funding, e-commerce giant Flipkart.com has raised over a half-a-billion dollars. In an interview with Business Line, the company’s CEO and MD Sachin Bansal, 33, gives the gameplan behind raising funds in quick succession.

With the kind of funding you have been able to raise and so quickly as well, what does it mean for the e-commerce space in the country?

It definitely shows that India is a big growth market. It comprises all kinds of opportunities. It also shows that investors believe that players in this space are in for the long term. It is the same scenario as it was in the nineties for the telecom space.

With the new investors joining in, don’t you think you have quite a lot of investors on-board now and some of them might in fact want to exit?

No. I don’t think so. Each one is different from the other and they have clearly told us that there are looking at the long term. Morgan Stanley, for example, is a half-trillion investment management company, Vulcan Capital Management is backed by the co-founder of Microsoft, Paul Allen while Dragoneer Investment has funded companies like Facebook. All of them are patient investors and are here for the long term and that’s what we wanted.

Where does successive funding leave you in terms of actual control in the company?

We hold a significant stake in the company. It is also not about trying to hold the maximum proportion of shares. Money is just a byproduct, almost, of being part of building something big. Flipkart has the potential to be among the largest e-commerce companies in the world.

Why did you have to raise funds so quickly again?

We have collected enough data in the last two years. It will allow us to access certain kind of infrastructure we require, give us access to better technology and will also allow us to hire more. The market in 2013-14 is at an inflexion point and as it is growing faster than what we believed, this funding will help us keep pace with it.

Are you also looking at acquisitions from the new round of funding you have received?

Yes, we are looking at acquisitions. It could be in specific customer side of things or categories which we are not into right now. It could be niche players or even those companies that could provide us back-end support for us, which will help us cut costs.

Will you go in for another round of funding and how soon do you plan to do that?

If we are surprised again by the kind of opportunities the market might throw up, we will probably do that.

Are your investors asking you to go public?

It is more a function of what we would like to do. First of all we are very well capitalised.

There is no hurry to bring in more investments. We want to time the markets well. Of course, we will have to go public at some time because that is our next goal. We are in a super aggressive growth mode and it may make sense to stay private. Right now we are focused on reaching the milestone of $1 billion in revenues by 2015.

Do you continue to make losses?

We are making losses at the operating level and that is a conscious strategy. We are reinvesting everything back in the business. We are profitable at the gross margin level. In 1-1.5 years, we estimate ourselves to be doing three times the shipments that we are currently doing. We do 60,000 shipments a day. In June, we did 1.3 lakh items a day. So we need to invest a lot more in infrastructure.

Any new things that you are looking to get into?

We are getting into larger electronic goods such as televisions, washing machines etc.

There are a huge number of small categories with large volumes such as toothbrushes and home décor that have a lot of scope. Apparel is another area. We are looking at a virtual trial room later.

giriprakash.k@thehindu.co.in

(This article was published on October 9, 2013)
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