MUMBAI (AFP) - India's top e-commerce company Flipkart said Tuesday it had raised US$1 billion (S$1.24 billion) in funds as it battles US giant Amazon for supremacy in the hyper-competitive local market.
Flipkart, set up in 2007 by two former Amazon employees, said Singapore sovereign wealth fund GIC was among those to participate in the fundraising, the latest cash injection into the e-commerce market.
"The fresh round of funding is a great milestone in the e-commerce industry of India," Flipkart's co-founder Sachin Bansal told reporters in Bangalore.
"Very few Internet companies in the world could have raised such funds publicly." Flipkart is the country's biggest online shopping portal in an e-commerce market that is still puny next to China's.
But the market, whose sales reached US$2.3 billion in 2013 according to Indian consultancy Technopak, is expanding rapidly, with venture capitalists pouring money into the sector, scenting potential.
Bansal, whose firm began with music and books and expanded rapidly into mobiles, appliances and other goods, said the funding was "validation of the view that India's Internet could produce multi-billion dollar companies".
Pragya Singh, associate vice president of Technopak, said "investors are realising that the firms they are investing in need their best backing" if they want to survive the stiff competition.
Flipkart had earlier drawn backers such as New-York based venture capitalists Tiger Global Management LLC and announced earlier this year that it had passed the one billion sales mark.
In May, Flipkart said it was taking over rival Myntra, India's top online fashion venture, in a deal analysts estimated at US$330 million - the largest of a string of transactions in the sector in the past two years.
Flipkart has been helped greatly by its service that allows customers to pay by cash-on-delivery. Many Indians do not own bank cards while others feel uncomfortable using them online.
Amazon, which entered the market mid last year, has been aggressively ramping up its presence in India through services such as same-day delivery, as well as large-scale advertising.
The US giant earlier this week said it would set up large warehouses in India to ensure speedy delivery.
Technopak's Singh said the future of Indian e-commerce was closely linked to the rapid spread of mobile internet.
"Mobile commerce is taking off in India and is being led by the smartphones wave."