Amazon to invest $2 billion in India, a day after Flipkart’s $1 billion funding. Source-The Economic Times

A day after Flipkart announced raising $1 billion in funds, e-commerce giant Amazon on Wednesday said that it will invest an additional $2 billion in India to support its growth in the country. “After our first year in business, the response from customers and small and medium-sized businesses in India has far surpassed our expectations,” said Jeff Bezos, founder and CEO of Amazon.com.
“We see huge potential in the Indian economy and for the growth of e-commerce in India. With this additional investment of $2 billion, our team can continue to think big, innovate, and raise the bar for customers in India,” Bezos said. “At current scale and growth rates, India is on track to be our fastest country ever to a billion dollars in gross sales. A big ‘thank you’ to our customers in India – we’ve never seen anything like this,” he added.

Amazon has scaled up rapidly in the country since its launch in June last year. It now sells over 17 million products across 28 categories and hosts about 8,500 merchants on its marketplace. The company has heavily invested in logistics and marketing. It has created a network of warehouses across the country and earlier this week announced opening of five more warehouses in cities like Delhi, Jaipur and Ahmedabad. 

It has also launched a slew of customer service programmes, like next-day and same day delivery. These initiatives are bearing fruit with the company already catching up with the number two online retailer in the country, Snapdeal, in terms of sales. Both Amazon and Snapdeal have sold about $600 million (about Rs 3,600 crore) worth of products this year and are targeting $1 billion or Rs 6,000 crore sales this fiscal. Flipkart, the market leader, reached that milestone last fiscal. 

Meanwhile, Flipkart, which raised $1 billion from a group of investors including Tiger Global, Naspers and Singapore’s GIC, is the largest online retailer in the country. It reached $1 billion in sales last fiscal and, according to sources, is on track to breach the $3 billion mark this fiscal. And Flipkart now has a marketing budget that is in the millions of dollars. 

The seven-year-old company has so far raised over $1.7 billion in risk capital. In May, it sucked in $210 million led by Russian billionaire Yuri Milner’s DST Global a few days after announcing its acquisition of fashion portal Myntra for an estimated $370 million. 

“This funding ensures that Flipkart can now invest in building on the promise they have shown,” said Arvind Singhal, chairman of retail advisory firm Technopak.

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India’s biggest online retailer Flipkart sets a new benchmark, raises $1 billion in fresh funds

Flipkart will announce possibly as early as next week that it has raised over $1 billion (Rs 6,000 crore), the biggest ever fund-raising by an Indian e-commerce company, two people aware of the development said. Half of the amount will come from existing investors Tiger Gobal, Russian billionaire Yuri Milner’s DST and Accel Partners while the rest will come from several new investors.

Among those who are said to be interested in investing in India’s largest online retailer are Singapore’s sovereign wealth fund GIC and USbased investment firm T Rowe Price. With this latest deal, India’s biggest online retailer will have raised over $1.7 billion, valuing it at over $5 billion. “The deal is done,” one person said. “An announcement could be made in a week or two.” Abillion dollars in fresh funding is not just a first for the Indian startup ecosystem, but is also among the biggest fund raises globally this year. In June this year, Silicon Valley-based Uber raised $1.2 billion at a valuation of around $17 billion.

“This is the war chest to consolidate Flipkart’s position in the country — the sector needs long-term, patient investors who can back with big money,” said the second person. Flipkart did not respond to an email query on the developments. Flipkart is rapidly scaling up its operations as it competes with Amazon.in and homegrown competitor Snapdeal. Snapdeal raised further funds of $100 million (Rs 600 crore) in May from Temasek, BlackRock Inc.,Myriad, Premji Invest and Tybourne at an estimated valuation of $1 billion.

Amazon has been pumping money in its India operations and has rapidly expanded to over 25 product categories. It has launched customer service initiatives like next-day and sameday delivery ahead of competition and has embarked on a massive marketing campaign. Flipkart, which crossed $1 billion in sales in March and even acquired online fashion retailer Myntra in May, has also launched customer service initiatives like same-day delivery in multiple cities and at-home trials for certain fashion categories. As orders cross the 5-million-amonth mark, Flipkart will have to continue investing in its backend operations in a cutthroat market. The company, along with other players like Amazon and Snapdeal, is also continuing to discount heavily.

Since 2013, top global investors have competed to pump money into India’s online retail industry, which advisory Technopak estimates will expand from the current $2.3 billion to $32 billion (Rs 13,700 crore to Rs 1.9 lakh crore) in six years.

Over the past four quarters, ecommerce companies cornered 72% of the $1.3 billion (Rs 7,700 crore) that went into Indian technology companies across 266 deals, according to research firm CB Insights.

India’s e-commerce sector is on fire, especially after Amazon entered the country last June. With some of the biggest retailers in the world jostling to get a piece of action in India, e-commerce companies in the country are riding a wave. For instance, while e-Bay is banking on Snapdeal, both Amazon and Walmart are pushing aggressively to conquer what is fast becoming the last frontier for them.

“It’s crazy — but justifiable considering e-commerce in India has just hit the tipping point and companies with most Market share will reap the biggest returns,” said a top executive at one of the e-commerce companies.

Mobile app firm News in Shorts raises seed fund from Times Internet

BANGALORE: News in Shorts, a mobile app firm that gives out top news stories in 60-word bite-sized portions, has raised seed investment from Times Internet and a group of entrepreneurs, including Flipkart cofounders Sachin Bansal and BinnyBSE -5.00 % Bansal.

The investment—the amount has not been disclosed—will be used mainly to expand its content and technology teams.

Launched last September, the Delhi-based company was part of the fourth batch of Times Internet’s accelerator T Labs. Times Internet is part of the Times Group, which publishes The Economic Times.

Aimed at time-starved users, News in Shorts curates top stories and provides a short summary of each news item. “We want to enable our users to consume top news quickly whenever they have time, maybe during a coffee break or a short metro ride,” said Azhar Iqubal, 21, cofounder of the company. Iqubal and his cofounders Deepit Purkayastha and Anunay Pandey, both 22, started work on the concept while in the eight semester of their engineering programme.

Iqubal and Pandey dropped out of IIT-Delhi and Purkayastha, a school friend of Iqubal, quit his course at IIT-Kharagpur to launch the firm.

The app has now clocked up over 30,000 users. One such user is Flipkart co-founder Sachin Bansal. “I am a user of the product and it saves a lot of my time everyday. News in Shorts has the opportunity to redefine the future of news consumption via mobile,” said Bansal. The Flipkart founders were joined by serial entrepreneurs—Ankush Nijhawan, Gaurav Bhatnagar and Manish Dhingra—and Times Internet.

It was the mobile opportunity that attracted Times Internet too. “We are very keen on mobile as a medium, along with that micro-content consumption has seen a rise,” said Abhishek Gupta, who leads the TLabs initiative at Times Internet.

Globally, a number of companies are banking on the consumer’s need for curated and personalised content. US-based provides top news in 300 characters through a mobile app. Flipboard, Paper and Digg are some of the other online and app-based news curators.

Bangalore-based Newshunt, a mobile app that allows users to read regional language newspapers on their mobile devices, has seen about 35 million downloads and receives over one billion page views a month.

Like other app companies News in Shorts is also focusing on increasing its user base. “Once we have a strong user base we can focus on revenue generation streams like advertisements and paid content,” said News in Shorts cofounder Purkayastha.news-ET

Aditya Birla Group to soon launch project to back e-commerce industry

MUMBAI: India’s fledgling e-commerce industry may get a new backer in billionaire Kumar Mangalam Birla.

The $40-billion Aditya Birla Group will soon launch a project to identify opportunities in e-commerce as rising disposable incomes, rapid adoption of smart phones and a large population of young consumers has given rise to enormous potential for online business. Prashant Gupta, who heads the chairman’s office, has been made leader of a new project to prepare the groundwork for the metals to telecom group’s foray into e-commerce.

Gupta was chosen for the project due to his 12-year stint at McKinsey & Co., which helped him gain deep insight into the long-term potential of various businesses, according to two people close to the development.

Ever since joining the group in 2010 as president, this graduate of the Indian Institute of Management, Ahmedabad, has assisted KM Birla in strategic planning and monitoring the diversified businesses.

“His mandate is to study the whole e-commerce space and evaluate the business potential. Based on his finding, the group will decide whether to take the plunge,” said one of the persons cited above.

In 2007, the diversified business conglomerate moved then CFO Sumant Sinha to lead the push into organised retail. Sinha was instrumental in taking over Hyderabad-based supermarket chain Trinethra and building up the retail business.

Aditya Birla Group’s move to get into ecommerce signals the appetite that India’s cash-rich, traditional business groups have for sunrise businesses at a time when local e-commerce ventures such as Flipkart script success stories, forcing global giants such as Amazon to step up their presence in India.

A recent study by McKinsey said India was on the brink of an Internet boom and it is estimated will have between 330 million and 370 million people going online by 2015.

India’s e-commerce market was worth $13 billion in 2013, with online travel booking accounting for more than 70% of consumer transactions. Online sales of retail goods amounted to $1.6 billion in the past year, according to research and advisory firm Forrester, and some industry experts expect this market to explode to $76 billion by 2021.

“Entry of big business conglomerates such as the Aditya Birla Group in this space will lend much more credibility to business being conducted through ecommerce, and therefore, the e-commerce universe is likely to become more encouraging for consumers,”said Ajoy Lodha, partner at Singhi Advisors — a Mumbai-based investment bank.

“So far the majority of the benefits of the exponential growth in valuations of the businesses like Snapdeal, Flipkart and Makemytrip.com has been taken by foreign investors,”he said. “Sometimes it leaves people wondering why Indian investors are not supporting the growth of e-commerce based businesses models.”

After building massive capacity and boosting revenue in traditional commodities businesses, the Aditya Birla Group turned to consumer-facing sectors such as telecom and retail in the late 1990s. The group made a big-bang entry into the retail sector by launching its own brand More in 2008 after entrepreneurs like Kishore Biyani built businesses such as Big Bazaar that changed the shopping habits of urban consumers.

The group spotted an opportunity in solar power in 2009 and turned this into a business proposition in 2011. Essel Mining has recently expanded into coal mining.news-ET

3D printing may turn cheap as patents expire

BANGALORE: A bunch of 3D printing patents expiring this year are likely to open up opportunities for Indian entrepreneurs to build more efficient, high quality printers that can even build objects in metal at a much lower cost.

This is likely to help entrepreneurs like Bangalore-based Prajnay R Boddepalli, 26, who was building a 3D printer along with his friend but postponed plans after realising that some of the technologies he was using could potentially breach existing patents.

Many like Boddepalli are eagerly waiting for the patents to expire later this year. If what happened in 2009 when some major 3D printing patents last expired and brought down prices by a huge margin is anything to go by, the market is likely to see another round of hectic innovations.

Many patents around selective laser sintering (SLS), which makes 3D printing more precise and functional, are among those that are set to expire and bring down costs for the manufacturers.

Even though we’ve built our 3D printer from scratch, we’d rather wait for the major patents to expire than to get into any patent infringement trouble, said Boddepalli, who did his MS in Industrial Engineering from University of Wisconsin before starting his venture last year.

Boddepalli currently uses two 3D printers from US-based Makerbot, a division of Stratasys, to create 3D prototypes for clients, including architects, product design firms and hobbyists.

After the expiry of these patents, Boddepalli expects to sell his in-house developed 3D printer for Rs 50,000, much lower than the $1,799 (Rs 1.07 lakh) he paid for his printers.

Most 3D printers available in India currently are built using open source technology, which limits the quality, size and the materials used for 3D prints.

The expiry of patents would let startups build products that are of finer quality and larger in size, along with the ability to use higher number of materials to print.

Bangalore-based Brahma3, which has already built a printer using its own technology, expects to come up with printers, which could print materials including metal.

Co-founders Nikhil Velpanur and Arvind Nadig’s Rs 1.2 lakh printer currently prints only plastic-based materials. news-ET

Google hit by 70,000 ‘right to be forgotten’ requests

LONDON: More than 70,000 people have already asked Google to delete links about them under Europe’s “right to be forgotten” ruling, with some of the world biggest news sites the first to be hit.

The search engine has restricted access to a BBC blog posting and several British newspaper stories under a legal ruling granting people a right to be “forgotten” in search engines, it emerged on Thursday.

Google said it had received 70,000 requests since it put a form online on May 30as a result of the ruling by the European Court of Justice.

The court said that individuals have the right to have links to information about them deleted from searches in certain circumstances, such as if the data is outdated or inaccurate.

But BBC economics editor Robert Peston complained that Google had “killed this example of my journalism” after being informed that a 2007 posting about former Merrill Lynch chairman Stan O’Neal had been removed from certain searches in Europe.

The Guardian newspaper also said it had been notified that six links to its stories had been removed from search results, three of them about a 2010 controversy involving a now-retired Scottish Premier League referee.

The newspaper said Google gave it no reason for removing the link or a chance to appeal.

Reports in Europe late Thursday indicated that Google restored some deleted Guardian story links to search results, indicating the California-based Internet titanBSE -0.40 % was refining the right-to-be-forgotten process on the go.

European news organisations have opened fire on Google for removing links to stories from search results in the name of adhering to the court order.

Mail Online, the world’s biggest news site, said it had received notification that links to a story about the same Scottish referee, Dougie McDonald, had been removed from certain searches.
Other stories restricted include one about a couple caught having sex on a train, and another about a Muslim man who accused the airline Cathay Pacific of refusing to employ him because of his name.

“These examples show what a nonsense the right to be forgotten is. It is the equivalent of going into libraries and burning books you don’t like,” said Martin Clarke, the publisher of Mail Online.

He said the website would regularly publish lists of articles removed from Google’s European search results, while the BBC and The Guardian also published links to the restricted stories.

The links remain visible on Google.com, the US version of the site, and the restrictions only appear to relate to certain search terms.

A commentary in The Guardian noted that a search for Dougie McDonald no longer brought up its story on Google.co.uk, but a search for “Scottish referee who lied” worked fine.news-ET

Tech Mahindra forms joint venture with Saudi Arabia’s Midad Holding

NEW DELHI: Tech Mahindra today said it has formed a joint venture with Midad Holding to provide IT and ITeS solutions in Saudi Arabia. Midad will hold 51 per cent stake in the JV firm (to be called Tech Mahindra Arabia), while Tech Mahindra will hold the remaining 49 per cent share.

“Headquartered in Al Khobar, Tech Mahindra Arabia will also have a presence across major cities in Saudi Arabia and will be functional post the regulatory approvals,” Tech Mahindra said in a statement.

Midad Holding is a subsidiary of Al Fozan, a diversified business group.

“Saudi Arabia has been a focus market for Tech Mahindra and we are excited about the economic potential the region has. This JV will establish the company as a leading player in providing IT and ITeS solutions,” Tech Mahindra Managing Director and CEO C P Gurnani said.

Additionally, it will also provide exciting career opportunities in the Saudi region, he added. Tech Mahindra, which has a presence in the region since 2006, offers services to customers across verticals like telecom, public sector, oil and gas, petrochemicals, utilities, manufacturing and BFSI.

The solutions will provide services in the areas of consulting, application development and management, network services, integration, engineering, managed services, remote infrastructure management, operational and maintenance services and BPO, it said.

“The purpose of the JV is to leverage Tech Mahindra’s global expertise in IT while maximising local content,” Midad Holding Managing Director and CEO Mohammed Al Baadi said.news-ET