The partnership between Flipkart and Tiger Global has been a major milestone for the e-commerce sector in India. Tiger Global Management LLC, an American investment firm founded by Chase Coleman, invested about $1 billion into Flipkart, along with 4 other investors. This has been heralded as a strategic move for both parties as it will allow Flipkart to increase its market share and provide security to Tiger Global’s investments.
Flipkart will use the funding to add more customers, enhance its product selection and strengthen its logistics network to give online shoppers the best possible experience. With this infusion of funds, the company expects to expand rapidly and achieve a lion’s share of the online retail sector in India.
Tiger Global on the other hand aims to receive high returns on their investments over time through this deal. This was made more favourable with their option of buying back shares at predetermined valuations at any point during their investment period. This structure ensures that there is no pressure on either party which should make Tiger’s long term plans easier to manage.
Tiger Global Leads $350 Million Investment
Tiger Global Management is a leading venture capital firm that invests in private and public companies. They recently led a $350 million investment in Flipkart, an Indian e-commerce company. This investment is a win-win for both companies. With this investment, Tiger Global can gain access to the Indian market and can provide Flipkart with the resources it needs to continue its growth.
Let’s take a closer look at the investment and how it can benefit both companies:
History and background
Tiger Global Management is an American hedge fund with a global footprint that has been an active player in the tech space since 2001. The firm has managed over $32 billion in assets since its inception and has consistently delivered highly competitive returns to its investors.
The firm’s strategy of investing primarily in growth-stage, tech-focused companies has made it a household name among venture capital circles. Tiger Global has provided capital to tech giants such as Google, LinkedIn, Facebook, Uber, and Airbnb in nearly two decades. In addition, the firm recently led a financing round for Indian e-commerce behemoth Flipkart valued at $1 billion.
The bond between Flipkart and Tiger Global began in 2009 when the latter invested $10 million into the former as part of its Series A funding round. Since then, Tiger Global’s involvement with Flipkart has grown exponentially – with multiple financing rounds across various milestones on Flipkart’s journey toward becoming India’s eCommerce leader. In addition to providing capital, Tiger Global also lends invaluable sector expertise and valuable market insight, enabling Flipkart to stay ahead of its competition and capitalise on favourable opportunities as they emerge.
Previous investments
Tiger Global is one of America’s leading venture capital firms focusing on publicly traded technology, Internet, financial services, e-commerce and consumer companies. Founded in 2001 by Chase Coleman III, the firm has created a track record of successful investments in technology companies worldwide including Dropbox, LinkedIn, Square and FanDuel.
Since its founding, Tiger Global has raised over $14 billion across 8 funds with some of their most notable investments being Facebook and Flipkart. In 2009 Tiger Global invested $7.4 million in Facebook as part of its Series A financing round for the company at a valuation of $6.8 billion; this investment eventually returned an eight-fold return for the firm after the IPO. Notably more recently in 2015, Tiger Global invested $2 billion by a series of 5 stakes into Flipkart at a total valuation of about US$15 Billion – one of their largest investments ever to date. By 2017 Tiger Global had sold its entire Flipkart stake worth around US$3 Billion via various secondary transactions to various investors like Tencent and Softbank; this move returned profits close to 3x what they put in originally along with additional millions created by strong IPO potential that may be realised once Flipkarts rumoured IPO takes place sometime next year.
Overview of Flipkart
Flipkart is an Indian ecommerce company based in Bengaluru, India that was founded in 2007 by Sachin Bansal and Binny Bansal. By 2020, Flipkart had become India’s largest ecommerce giant with a range of products including clothing & accessories, home furnishings, shoes and electronics. With more than 100 million registered users and 10 million daily visits, Flipkart is currently the leading online marketplace in India.
Recently, Tiger Global led a $350 million investment in Flipkart – let’s take a deeper look into this investment and how it will help both companies.
History and background
Flipkart is an Indian e-commerce company and one of India’s largest online retail stores. Founded in 2007 by Sachin Bansal and Binny Bansal, two alumni of the Indian Institute of Technology Delhi, Flipkart currently offers over 30 million products across 70+ categories, including books and media, consumer electronics, apparel and numerous other products.
Since its founding in 2007, Flipkart has rapidly expanded its presence through innovative strategies and quality partnerships. The company now serves over 50 million customers across India with a wide range of products and services.
In 2014, US-based investor Tiger Global invested $1 billion into Flipkart under the leadership of Lee Fixel. This investment was a major turning point for the e-commerce giant when it was looking to redefine its growth strategy to compete with global players such as Amazon and Alibaba Group. In 2015, Tiger Global’s investment helped Flipkart raise an additional $700 million from investors including GIC Singapore Holdings Pte Ltd., DST Global Limited, Microsoft Corporation and Qatar Investment Authority.
The strategic alliance between Tiger Global and Flipkart has consistently proven beneficial for both parties involved. As an investor partnering up with one of the biggest names in the Indian e-commerce space – one that many consider most probable to emerge a leader among category disruptors – Tiger Global not only gets huge returns on their investment but also receives valuable insight on macro trends that inform their entire strategy as an investor. At the same time, they continue to invest into this dynamic space. Meanwhile, Flipkart gains access to resources that help it develop innovative solutions designed specifically for India’s growing digital economy—a major factor behind its success over these years!
Previous investments
Before Tiger Global’s investment in Flipkart, there had been many investments from other technology companies and venture capital firms. Between 2010 and 2013, Flipkart raised around $1.02 billion (INR 6,939 crore) from investors such as Naspers, Iconiq Capital, Dragoneer Investment Group and Yuri Milner’s DST Global.
Tiger Global first invested in Flipkart in 2009 with a Series A round worth $10 million (INR 65 crore). In 2011, the firm pumped in Rs 360 crore (approx. $56 million) in a Series C round. Following this, it made a series of strategic investments and sold stakes until its most recent investment this April.
Some of the other notable investors who have put money into Flipkart include:
- Microsoft Corporation and eBay Inc., who have invested more than Rs 2,500 crore (approx. $390 million) into the company since 2017;
- Tencent Holdings Limited which has invested more than Rs 2,700 crore (approx. $400 million);
- Google Inc., which has so far poured in more than 1,300 crore (approx. $200 million) since October last year; and
- Qatar Investment Authority, which is reported to have invested around Rs 4500 crore (almost $700 million).
Tiger Global’s Investment in Flipkart
Tiger Global recently led a $350 million investment in the Indian e-commerce giant Flipkart. This investment is a win-win scenario for both companies as it will give Tiger Global an equity stake in the company, allowing them to capitalise on the success of Flipkart. At the same time, Flipkart gets the capital infusion it needs to keep expanding and competing with its rivals.
Let’s get into the details of why this is a great deal for both parties:
Benefits to Tiger Global
Tiger Global’s investment in Flipkart is a win-win for both companies as it offers many benefits to Tiger Global, such as access to India’s booming e-commerce sector, one of the fastest growing in the world. Tiger Global can also benefit from being part of a leading e-commerce platform, with access to Flipkart’s technology and infrastructure. In addition, Tiger Global can leverage its financial resources and support with investments in areas such as marketing activities, product development, and customer service.
This strategic investment by Tiger Global allows Flipkart to continue expanding its operations across key markets and categories while building a customer base with diverse professional backgrounds and creating new job opportunities. Moreover, Flipkart can effectively manage its finances and create an efficient supply chain network that helps it remain consistent as a market leader. The partnership also opens up new opportunities for collaboration between the two companies that could lead to more efficient manufacturing standards and improved cost competitiveness in India’s highly competitive online marketplace.
Benefits to Flipkart
Flipkart has been actively seeking investments from various venture capital investors since its inception in 2007. Recently, Tiger Global Management, a New York based hedge fund, invested $1 billion into Flipkart – one of the largest investments made by a venture capitalist into an Indian company. This investment is expected to take Flipkart to the next level, helping it to become the leading e-commerce marketplace in the Indian market.
The Flipkart Group has ambitious growth plans and Tiger Global Management’s billion-dollar investment provides an opportunity to capitalise on these goals. Here are some of the benefits that Flipkart will gain from Tiger Global’s strategic investment:
- Access to Expertise: With its rich experience in the global e-commerce industry and deep pockets, Tiger Global will bring invaluable insight and expertise to Flipkart. This invaluable knowledge will help build robust strategies for growth and expansion of Flikpkart’s existing markets around India and global markets like the United States and China.
- Strengthened Financial Structure: The cash infusion from Tiger Global not only strengthens Flipkart’s current financial structure but also ensures long term financial stability for further investments in people and infrastructure. This will help Flipkart win customers by providing better services than its competitors.
- Advanced Technology: An alliance with such a big global player as Tiger Global can help provide access to advanced technology which may be lacking at other levels such as data management systems or marketing platforms used across multiple countries. Also, this collaboration gives access for developing new technologies that better suit Indian consumers with more accurate data insights at local level.
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