flipkart sachin binny bansal

Sachin and Binny Bansal, founders of Flipkart. Pic: Flipkart

India: Flipkart seeks more funding as value gets marked down by over a third

FLIPKART’S value has been slashed by more than a third by a mutual fund managed by Fidelity as the company looks for more funding.

This is the fourth time Fidelity has marked down the value of its holdings in the Indian e-commerce player since investing in the firm in April 2013, according to a report in the Times of India. Fidelity cut the share’s value by 36 percent, which saw the company’s valuation plummet to US$5.57 billion from a peak of US$15.2 billion.

The move follows similar devaluations by investors such as Valic, Morgan Stanley and T Rowe Price in recent times and comes just after a major reshuffle at the top of the firm that saw five top executives leave in the past month and co-founder Binny Bansal replaced as CEO by Kalyan Krishnamurthy – the pick of chief investor Tiger Global.

SEE ALSO: Flipkart, Ola seek government support to ward off foreign competition like Amazon

Flipkart co-founder and executive chairman Sachin Bansal has told Live Mint Flipkart is not concerned about previous markdowns, which he described as “theoretical exercises”. But the company has declined to comment on the most recent devaluation.

The company is in the midst of trying to raise new funds as it fends off increasing pressure from US rival Amazon. “At the time when we invested in Flipkart (in 2013), we did not anticipate that Amazon would rise so quickly and pose such as significant challenge,” an unnamed executive at a Flipkart investor told Live Mint.

It looks increasingly likely the firm will have to accept raising funds at a lower valuation than its previous funding round two years ago following the lead of other domestic tech giants like Ola and Snapdeal, which Live Mint reports are both considering so-called “down rounds”.