How Flipkart BEAT Amazon at Their Own Game

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Silicon Valley of India Part 1 - https://youtu.be/C5u5mmVwDrE
Silicon Valley of India Part 2 - https://youtu.be/8oZPc3B0bS4

00:00 Intro
02:12 Arrival of Amazon
03:23 Beginning of Flipkart
05:52 Flipkart's First Fundraise
07:56 India's E-commerce Boom
10:02 Amazon Vs Flipkart
11:28 Conclusion

In the first and second part of ‘How Bengaluru became India’s Silicon Valley’, we discussed the journey from Bengaluru’s early history, to setting up of Indian Institute of Science, and then finally the post dot-com bubble burst scene.

In this video, we take a look at how Amazon’s arrival into India changed Bengaluru’s entrepreneurship scene forever. Amazon hired best talent in India and focussed obsessively on customer satisfaction, and this was adopted by two of it’s employees, Sachin and Binny Bansal with their own E-commerce startup, Flipkart.

A month before Flipkart was started, Infibeam launched their own Amazon-inspired e-commerce platform. The company’s founder, Vishal Mehta, had been working for Amazon in Seattle for 5 years before moving back to India in 2007 after realising that Amazon had put their plans to launch in India on hold.

Meanwhile, Binny and Sachin were struggling financially. They’d approached Sequoia, Matrix Partners, IDG Ventures, Nexus Venture Partners, but without any luck.

In 2010 when Flipkart raised their headline-grabbing Series B, but they weren’t the only game in town. Fabmart.com had been around since 1999, and by 2010, they had rebranded to indiaplaza.com and then there was also Myntra as well.

Then, in Mumbai, Flipkart had an indirect competitor in eBay India, and there was also Naaptol, which is still around to this day. In 2010, Flipkart’s real competition wasn’t in Ahmedabad or Bengaluru - it was in NCR, where a number of companies were vying for a piece of the e-commerce pie.

One of the earliest was Snapdeal, which got its start in 2008 as a coupon service in Delhi called MoneySaver, which was pivoted into Snapdeal in 2010, and at that time they weren’t selling products, they were selling discounts, so they weren’t a huge threat yet.

Besides Snapdeal, you also had Homeshop18LIST starting out in 2008 in Noida, Letsbuy came onto the scene in 2009 as eTree Marketing in Gurugram and was selling items like mobile phones, cameras, laptops and home appliances, and then in 2011, Gurugram-based startups like Jabong and Shopclues appeared too.

Jeff Bezos was excited by the burst of e-commerce activity in India, and finally decided to put their limited presence in Bengaluru to good use. But instead of trying to re-enter India under their own name, Amazon instead approached Flipkart in 2011 to talk about a potential acquisition13, and in response, Sachin Bansal told Amazon that he would only sell at a 1 billion dollar valuation. This deal didn’t happen and Flipkart ended up raising 20 million dollars from Tiger Global, this was their Series C round, later on in 2011, at a 200 million dollar valuation. This was the single-biggest round of funding secured by an e-commerce startup in India.

Flipkart would go on to raise 150 million dollars in their Series D round, then 200 million, then 160 million, then 210 million, and then a billion dollar Series G round in 2014. And they weren’t the only ones raking in the capital here - in 2014, Snapdeal raised a massive round too: 600 million dollars from Softbank, and this is just e-commerce we’re talking about here. There were multiple other industries being fought over by startups at around this time, like Ola and TaxiForSure, both of which were based in Bengaluru, and then Uber showed up, with Bengaluru being its first city as well. And then towards the end of 2014 and into 2015, India saw its first startup food fight, where companies like FoodPanda, TinyOwl, Swiggy, and Zomato raised hundreds of millions of dollars to capture India’s food delivery space.

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