From $1 billion to $750 million valuation, Flipkart’s ‘down’ round in 2012 was at its toughest times
Terming 2012 as the toughest year, Flipkart, Executive Chairman and Co-Founder, Sachin Bansal on Friday said the company had to go for a down round of funding as he made the wrong call of delaying raising money on hopes of better valuations. “It was the toughest time for us. We were hoping that if we delay raising funds that was available, we would be able to get a better valuation. However, Flipkart had to raise funds at valuations of $750 million compared to $1billion in the round before it,” said Bansal at TiE Delhi-NCR organized India Internet Day. In August 2012, Flipkart had announced it had raised Series D funding of $150 million from MIH (part of Naspers Group) and ICONIQ Capital. A down round of funding is denoted by investors purchasing stake or shares in a company at a lower valuation than the valuation arrived at by earlier investors. Talking about this little known part of the company’s journey, he went on to add that from the middle of 2012 till the end of the year the company did not grow and had to go back to the drawing board and regroup. “We had to reduce cost and figure out ways to provide better customer experience,” said Bansal. According to Bansal the current financial conditions for startups is similar, but he would not be worried about it. “A lot of times people look at a down round negatively and it is not a pleasant situation for any company, but the fact is that almost every Internet company around the world go through it. Facebook is an example of this. Financial cycles govern this and even today we are seeing much of that happen. Down round for me is not negative and for me business interests needs to be ahead of everything else. These things take care of themselves. I would keep my head down, keep executing and carry on with business,” says Bansal. For budding entrepreneurs Bansal’s advice was that one should raise funds when they can, rather than when they have to. “Do not get into a situation when you really need funds and you get into a situation where you have to look for investors. We have followed this is Flipkart and this was a learning we had in 2012 when we delayed fund raising in the expectation of better valuations. That was a wrong call,” said Bansal. Publicly available data shows Flipkart has raised about $3.2 billion in funding over 12 rounds from 16 investors. Bansal says the company has not thought of listing on the bourses. “I think the depths in private markets allow you to stay longer and every entrepreneur should take advantage of this and stay private longer. This is the trend across Internet companies across the world and I think it is a good thing. However, this is not a formula and depends from company-to-company. We do not need to raise funds and the need to tap public markets will be made at the right time when we need it,” said Bansal. Startups in the country and around the world have found it difficult to raise money as wary investors have tightened their purse. Having braved the financial downturn of 2009 and internal challenges of 2012, Bansal, however, is optimistic. “It is important to remember good times do not last forever and bad times also do not last forever,” said Bansal. Tobias Enstrom Authentic Jersey
‘Many flaws in Mumbai airport PPP’
The PAC has pulled up the Civil Aviation Ministry and the Airports Authority of India over several lacunae in the public-private-partnership at Chhatrapati Sivaji International Airport, Mumbai. The main grievance of the panel is that the entire contract was drafted to help the private partner, the Mumbai International Airport Private Ltd, of which, GVK is the main shareholder. On airport development fee (DF) , the panel said the Airport Economic Regulatory Authority is competent to fix it and it expects the regulator to determine the DF in future keeping in view the revenue interest of the Centre in PPP projects and also the interests of passengers. The panel expressed surprise while noting that instead of looking at debt and equity contributions, the Civil Aviation Ministry allowed MIAL to levy DF at the airport for funding/financing the cost of up-gradation and expansion/development of the airport in contravention of the provisions of the OMDA (operation, management and development agreement). The committee also said that neither the OMDA nor the lease deed signed between AAI and MILA demarcated and defined the specific details of the leased land. The report said AAI did not have up-to-date land records. It said the MIAL gained 10.23 acres of additional exploitable land. “The revenue from these activities would not be considered for determination of airport charges,” the report added. The committee noted that on account of cross alignment of the two runways, airport has a design constraint. Ryan Carpenter Authentic Jersey
Mangaluru airport handles 1,650 tonnes of domestic cargo in 2015-16
Mangaluru International Airport handled 1,650 tonnes of domestic cargo in 2015-16. The airport commenced domestic cargo handling operations on June 26, 2015. A press release by JT Radhakrishna, Director, Mangaluru International Airport, said on Thursday the airport handled 1,650 tonnes in the nine months to March 31. He said the airport expects to handle 2,500 tonnes of domestic cargo during the current financial year. Mumbai-based Cargo Service Centre handles the domestic cargo operations at the airport on behalf of the Airports Authority of India. The airport handled around 560 tonnes of international cargo in 2015-16. Radhakrishna asked the trade and industry bodies to use the cargo handling facilities at Mangaluru for exports and imports within the country and to other nations. Jordan Akins Womens Jersey
Chennai airport records 12% growth in passenger traffic
Chennai airport achieved a 12 per cent growth in passenger traffic and a 9 per cent increase in cargo handling during 2015-16 despite the ‘devastating’ effect on its operations due to floods in December, said Chennai Airport Director Deepak Shastri. In 2015-16, the airport handled 15.3 million passengers as against 13.7 million in the previous year. Cargo handling was 200,000 tonne as against 184,000 tonne in the previous year. “We exceeded the target for the fiscal set by the Aviation ministry,” he told Business Line. Last December. the airport was flooded with water from the Adyar River that passes under the second runway. The airport, which witnesses over 350 flight movements every day, had to be shut down for four days from the night of December 2. The flooding had a devastating effect with the airport cancelling 66 arrivals and 53 departures late on December 2 and early December 3. On December 8, the airport was fully operational. Secondary runway On the secondary runway getting approval for 24-hour operations, Shastri said it would increase aircraft movement to 35 per hour from the present 29 moves per hour. It started operations in May 2014 but has so far handled operations only during daytime. Shastri said the airport needs additional 14-16 acres to have more space to handle wide-body aircraft. At present, the runway can handle A320 type aircraft. Anthony Duclair Womens Jersey
India offers $100 million for infrastructure fund to Papua New Guinea
Seeking to strengthen bilateral ties and ensuring energy security, India today offered a USD 100 million line of credit for development of infrastructure in Papua New Guinea (PNG) and agreed to jointly develop new avenues of cooperation to explore and develop the Pacific nation’s vast oil and gas resources. India, during a meeting between visiting President Pranab Mukherjee with his PNG counterpart Sir Michael Ogio, also offered a coastal surveillance radar system and Coast Guard patrol vessels to the country as part of its commitment for the mutual maritime security initiative. After the completion of the maiden two-day visit to PNG by President Mukherjee, the two sides in a joint statement highlighted various international and regional issues including terrorism, India’s candidature for permanent membership of the UN Security Council and maritime security. The two sides agreed to establish a mechanism for regular consultations between the foreign ministries of both countries aimed at diversifying bilateral cooperation in areas of shared interest. “Keeping in view India’s desire to achieve energy security, PNG agreed to develop new avenues of cooperation with India in exploration and development of Papua New Guinea’s vast oil and gas resources through joint ventures and Indian public and private sector investment in new and existing projects,” the joint statement said. A deal for extending an Indian line of credit of USD 100 million for development of infrastructure in PNG was also signed. PNG announced a visa-on-arrival facility for Indian tourists travelling to the Pacific Island as a “gesture of reciprocity” as India has already approved a similar facility for the nationals of all Pacific Island countries since last year. India also announced providing retro-viral drugs and equipment for the treatment of 20,000 HIV patients in PNG for a period of one year. Both leaders also witnessed signing of the Memorandums of Understanding on agriculture research cooperation between University of Technology in Lae in PNG and the Indian Council of Agricultural Research (ICAR). The two sides finalised and signed a MOU for broad ranging cooperation in the health sector. Cincinnati Bengals Jersey
Patanjali will shut the gate in Colgate, make Nestle’s bird disappear: Baba Ramdev
Baba Ramdev has thrown down the gauntlet at his FMCG rivals, predicting that Patanjali Ayurved had the potentional to upstage big names Colgate, Unilever and Nestle in a matter of few years. “Colgate will be below Patanjali by this year, and in three years, we will overtake Unilever,” Ramdev told reporters while announcing Patanjali Ayurved’s Rs 1,000-crore investment plan this year for setting up five or six new processing units in Assam, Maharashtra, Madhya Pradesh, Rajasthan, Haryana and Uttar Pradesh. “Patanjali would shut the ‘gate’ in Colgate. The birds in Nestle’s nest (logo) will also fly away,” Ramdev said in a direct dig at his rivals. “Pantene ka to pant gila hone wala hai, aur do saal me Unilever ka lever kharab ho jayega,” the yoga guru said, mocking his MNC competitors. When asked whether his firm was eating into the market share of MNCs, Ramdev said: “We are totally vegetarian.” The Ayurveda-based company, which has been growing exponentially in the last four years, plans to venture into exports and e-commerce this year. “We will be exporting honey and cosmetics to 10-12 countries, including US, Britain, Canada, African and Arab countries,” said Patanjali managing director Acharya Balkrishna. The company also wants to expand its product base to dairy products and yoga clothing. Ramdev is drawing up a strategic plan to launch a pincer movement on MNCs. On one hand, he is planning to open Patanjali mega stores across India starting with Nagpur and Lucknow, while on the other he has readied a premium brand ‘Soundarya’ to take on the likes of big cosmetics brands such as L’Oreal and Maybelline. Patanjali reached its revenue target of Rs 5,000 crore for the year ended March 31, said Balkrishna. “We have made profits of 8-12%,” he said. “And we are just getting started. Wherever we see MNCs taking advantage of Indian consumers, we will enter that segment with better quality natural products and affordable pricing. At the same time, we need to get more competitive in modern trade. These mega stores will help us get there,” he said. The proposed Patanjali mega stores that will sell everything from noodles and biscuits to ayurvedic medicines and ghee, will measure around 5,000 square feet, according to Balkrishna. Currently, apart from e-commerce channels, Patanjali products are sold through 1,200 Ayurvedic Chikitsalayas, 2,500 Arogya Kendras and 8,000 Swadeshi Kendras. Add to that thousands of kirana stores across the country and partnerships with modern retail chains such as Big Bazaar. Prince Fielder Authentic Jersey
Food & beverage to account for 42% of household expenditure: Report
Food and beverage would account for 42 per cent of the Indian household expenditure by 2021, a report has said. According to the customer marketing company Hansa Cequity’s report, with 42 per cent, food and beverage will top spot the household consumption expenditure by 2021. Hansa Cequity’s report, with 42 per cent, food and beverage will top spot the household consumption expenditure by 2021. Besides, education and conveyance would be be 7 per cent, medical (5) and durable goods (6) of the total consumption expenditure. Due to the expanding middle class population in the country, the share of discretionary spending is expected to contribute 56 per cent to the household expenditure. In rural areas, expenditure on conveyance, education and medical is on the rise, whereas in urban areas conveyance, personal care and medical will account for large part of non-food expenditure. “This signifies that larger portion of household’s income will be spent on self-care, self-development, and education,” it said adding, expenditure on motorcycle and scooter, mobile phones and other durables are expected rise by 2025-26. It noted that credit cards are still lagging behind in the payment choice, with cash and debit cards being the preferred choice. “High interest rates, pre-screening requirements, security fears by households are some of the reasons for this lag,” it said. Co-founder and COO of Hansa Cequity Ajay Kelkar said: “With India’s middle class population on the rise, the marketers are keen to understand on how much each individual household spend and what are the changing dynamics of these spending patterns.” William Perry Womens Jersey
How Amazon convinced you to pay up for shopping
Amazon is clearly entering its Prime. Meaning, of course, its $100 annual membership program, now a decade old, which has accomplished the remarkable feat of convincing millions of people to pay an annual fee for the privilege of, well, shopping. Prime is now central to Amazon’s strategy of dominating the world of commerce. What started as a yearly fee for free two-day shipping now offers a sometimes bewildering array of perks, including household product subscriptions, one and two hour Prime Now delivery, streaming music and video, e-books, groceries (for an additional $200 a year), photo storage and more. “Prime has become an all-you-can-eat, physical-digital hybrid,” Amazon founder and CEO Jeff Bezos wrote in his annual shareholder letter in April. He wants the service to be such a good deal that you’d be “irresponsible” not to sign up, he wrote. Why the emphasis on Prime? Simply put, members of the loyalty program shop more frequently and spend more money, analysts say. Prime shoppers helped drive Amazon’s surprise profit surge in the first quarter. Shares of the e-commerce giant jumped in after-hours trading Thursday after it reported a 28 percent jump in revenue, to $29.13 billion. Net income was $513 million, compared to a loss in the year-earlier quarter. Amazon doesn’t release detailed numbers on Prime, although Bezos wrote that Prime has “tens of millions” of subscribers. Wedbush Securities analyst Michael Pachter estimates there are about 50 million Prime members. Even a 25 percent price increase in 2014, the only one for Prime in 10 years, hasn’t appreciably dampened enthusiasm for the program. Membership grew 51 percent last year, including 47 percent growth in the U.S., according to Bezos. Pachter estimates that Prime members spend about four times what others do, and account for about a third of all Amazon purchases. “That’s why Prime matters,” he said. Tawnie Knight in Tuscon, Arizona joined Prime about two years ago for the convenience of free shipping. Since then Amazon has become her default shopping site. “I call it the $100 cart, because every time I go on there I spend about $100,” she said. “Before Prime I probably spend around the same amount, just with other retailers like Walmart.” Brandon Kraft joined Prime when it began 10 years ago to get cheap textbooks while in school. Now he finds it essential – with five kids ranging in age 17 months to 6 years at home – for ordering diapers and wipes and other household goods. “I think it’s fair to say we spend $125 or $150 a month at Amazon that we wouldn’t have been spending if we didn’t have Prime,” Kraft said. “We go to the Amazon site first when we need something, and if they don’t carry it we start the actual shopping process of looking elsewhere.” Of course, Amazon Prime isn’t for everyone. Those that shop infrequently online won’t find the $100-a-year fee worth it. With an estimated 244 million registered Amazon accounts, a large majority of Amazon shoppers – roughly 80 percent, in fact – haven’t signed up yet. Amazon continues to add Prime offerings to entice more users. Last week Amazon started offering a monthly Prime subscription for $11 a month, aimed at hooking shoppers during the holidays when the majority of Prime members sign up. In 2015, 3 million shoppers joined Prime in the third week of December alone. Amazon also introduced a standalone video service for $9 a month, setting itself up to directly compete with other streaming services like Netflix. Investors have long griped about Amazon’s strategy of investing the revenue it makes into new offerings, leading to little or no earnings growth. But the first quarter results were the fourth in a row in which Amazon reported a profit, which some analysts interpret as a willingness to rein in costs when needed. Chief financial officer Brian Olavsky, however, told reporters on a conference call that the company’s profits stem mostly from strong growth in sales. The company isn’t slowing its investments, he said, citing recent spending on logistics and original programming for its streaming video service. Keelan Cole Authentic Jersey
Haryana formulates scheme for e-commerce linkages of MSMEs
Haryana Government has formulated a scheme for e-Commerce linkages of Micro, Small and Medium Enterprises (MSMEs) for online trading and brand building of their products. The scheme is primarily focused on increasing quality, industrial output and employment generation through incubation of e-commerce in the state, a spokesman of Industries and Commerce Department said here today. He said inclusion to digital commerce would help SMEs to scale up their business at much lower levels of investment in fixed assets and human capital, thus reducing their cost structures. Online market place would provide a cost effective impetus for growth, opening a window to new markets, increasing spread by shortening traditional supply chains, containing systemic inefficiencies, reducing costs, thereby leading to higher revenues and profit margins for SMEs. To achieve this objective, the SMEs would need to quickly make significant changes to their business models to suitably take advantage of the opportunities presented by e-commerce. Detailing about salient features of the scheme, he said it will create online catalogue and realise advantages of digital marketing and other allied services provided by online market place namely Digital Marketing, Logistics and Fulfilment Service and Payment Collection. Once listed, products are viewed by millions of potential customers across India and abroad. The customers or end users will buy products online with secured payment infrastructure and it ensures systematic cash flow, he said. The expenses incurred on such workshops or seminars would be met out of the funds earmarked for e-commerce activities subject to a maximum of Rs 20,000 per workshop of one full day which would include cost of arranging conference hall, honorarium to the guest speakers and refreshment to the participants. The department would also avail the services of e-commerce companies. He said the expenses incurred on listing of on-line marketplace would be reimbursed to all the eligible manufacturing MSME units subject to a maximum of Rs 50,000 towards enrolling expenditure, sustenance of online business for a period of four months in continuation, within a given financial year. Brandon Marshall Womens Jersey
Flipkart challenges entry tax on online sale in Gujarat in High Court
Gujarat High Court today issued a notice to the state Government on a petition filed by the online retail major Flipkart against the entry tax in the state on the goods bought through the e-commerce portals. The division bench of Chief Justice R Subhash Reddy and Justice V M Pancholi scheduled the next hearing for June 9. Flipkart has claimed the tax is discriminatory, because no such tax is imposed on the goods brought into Gujarat thorough other modes of sale. It moved the HC after the Gujarat Government amended the law to levy entry tax on goods purchased through e-commerce portals, apparently to provide a level-playing field to the traders and retailers in the state. The Gujarat Tax on Entry of Specified Goods into Local Areas (Amendment) Bill, 2016, was passed on March 31. Now 15 per cent entry tax is levied on the online purchases. Flipkart’s contention is it does not sell any product itself but only provides an online platform to manufacturers/ traders, so the tax is unjustified. The new law amends the word “importer” to cover those who “bring or facilitate to bring any specified goods for consumption, use or sale in Gujarat from any part of the country using online platforms.” Marquette King Jersey