India's Ecommerce Poised To Mint First Two billionaires: Guess Who?

30 Mar 2015

flipkartThe two co-founders of India’s largest ecommerce player, Flipkart, are just one step away from turning billionaires. Flipkart is in advanced talks to raise $600-800 million which will value the online retailer at $14-$15 billion, sources told India’s Mint newspaper. At that valuation, co-founders Sachin Bansal and Binny Bansal, who share the same last name but are not related, will turn billionaires with a net worth between $1.05 billion to $1.12 billion each for their equal 7.5% stakes. The news was independently confirmed by an investor who said the deal is likely to sealed in the coming weeks.

The two small town boys who launched their startup from an apartment in Bangalore with 400,000 rupees ($6,500) cash have come a long way. With eye-popping valuations and astounding growth numbers, the Bansals are the newest rock stars in India despite some anxiety that internet businesses globewide are in a valuation bubble waiting to shatter.

Flipkart, India’s largest retailer both online and offline, raised $1.9 billion in 2014 including a $1 billion round with investors including the New York-based hedge fund,Tiger Global. Besides Tiger Global, its investors include Russian billionaire Yuri Milner’s DST Global, South Africa’s Naspers, Silicon Valley’s Accel Partners and the Qatar Investment Authority. Global investors are fighting to invest in Flipkart which they see as the next Alibaba, China’s ecommerce leader, allowing the choosy Flipkart to dictate terms to potential investors, including demanding that they sign non-compete agreements forbidding them from talking to or investing in other ecommerce firms for six months. The latest fund-raising round is likely to have a new investor as well as participation from existing funds.

The lives of Sachin, 33, and Binny, 32, have run parallel. They were both raised and educated in a convent school in Chandigarh town, about 150 miles away from India’s capital, New Delhi. Later, both graduated as computer science engineers from India’s leading technology school, Indian Institute of Technology in New Delhi. Prior to launching Flipkart in 2007, which they initially envisaged as an online bookstore, both Bansals were employees of Amazon.

Since then, the Bangalore-based startups’s rise in the Indian ecommerce scene has been nothing short of meteoric. It has attracted marquee global investors, is accumulating a huge cash chest and growing at a frantic pace. The online retailer today lists 20 million products, has 40 million registered users and ships 8 million products. It has 33,000 employees currently. It recently announced that it aims to generate 2 million jobs in 2015 through its marketplace and supplementary services. According to a new report by Morgan Stanley, Flipkart has 44% of India’s ecommerce marketshare, followed by its younger competitor Snapdeal which has 32%.

 

Source: FORBES

Last modified on Monday, 30 March 2015 16:51
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