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Flipkart raises $700 million in latest round of funding of big ecommerce race.

Flipkart has closed a funding round of $700 million (Rs 4,500 crore) at a valuation of $15 billion, scooping up capital for the first time this year as the battle for dominance in the Indian online retail market heats up.

In last one year, Flipkart has seen various funding rounds starting from new and existing investors. After the $1 Billion funding round in July last year, Flipkart went on to secure $700 million in December followed by a relatively small investment of $210 Million from DST Global earlier this year.

The fund raising comes just days after Amazon reiterated its commitment towards India by reportedly promising a $5 billion investment in the country. This is over and above the $2 billion the company had committed last year.

Seen against the $7 billion investment commitment from Amazon, Flipkart’s warchest looks pittance. But as Ashish Gupata of Helion Venture Capital tells ET, it is now all about staying in a legitimate e-commerce market which is expected to grow to $137 billion by 2020.

To overcome the challenge, Flipkart is adding high-margin categories such as furniture, homes and travel booking, which it expects will boost its annual sales in terms of retail price (gross merchandise value, or GMV) to $10-12 billion in 9 months to a year, more than double the $4 billion it achieved in 2014-15.

India’s $600 billion retail market is also coveted by Chinese ecommerce giant Alibaba, which is in advanced talks to increase its stake in Delhi-based Paytm to 40 per cent by investing an additional $600 million in it. Alibaba founder Jack Ma has visited India several times after its blockbuster initial public offering in the United States last year and has put in place a team to focus on making strategic bets in the country.