Ecommerce company Flipkart has been finding it quite difficult to raise funding in the past couple of months. The etailer saw an increase in its losses by 110% and continuous devaluations by Morgan Stanley and Vanguard.
There was a 70% decrease in investment to the online marketplace from its parent company, in March. The etailer is looking to raise funding worth $1billion by year end.
Borrowing from Banks
According to the latest documents filed with the Registrar of Companies (RoC), Flipkart has finally managed to secure a loan of Rs.300 crore from IDFC Bank. The credit agreement was signed in September through Flipkart India, a key entity that controls the Bangalore-based marketplace.
HDFC Bank lent to the ecommerce company in February this year. Flipkart received a loan of Rs. 450 crore from the bank. These funds are being used to meet daily working capital requirements of the online retail platform.
Loans to save investment funding?
Raising investments has been tough for B2C ecommerce companies. So credit from banks will help companies like Flipkart save their investor funding and acquire a much longer runaway.
In the documents files to the RoC, Flipkart did not mention the exact reason for this new credit line. However, its spokesperson said,
“This is a regular credit line taken for operations in our normal course of business.”
Funding from Investors
The online marketplace has been in talks with foreign companies Walmart and the Canada Pension Plan Investment Board for the purpose of fresh funding. The etailer has also spoken with Alibaba to raise new funds. But, it appears that the issues with valuation are making things difficult for Flipkart to acquire funding.