Updated on 3rd October: Today Vinod Khosla tweeted that he had not stated that Flipkart and Snapdeal were overvalued.
Prominent Silicon Valley investor Vinod Khosla said yesterday that India’s ecommerce giants Flipkart and Snapdeal might be overvalued, reports Business Standard. Khosla who had supported Google in its initial days and founded Khosla Ventures, stated, “If you ask me Flipkart, Snapdeal and other ecommerce startups are overvalued. But if you add up their market capital today and look 10 years later with the market cap then, I’m convinced it will be higher.” He added that about 85% of Indian ecommerce firms were over-valued.
Flipkart, country’s largest ecommerce company, is currently valued at $15.5 Bn, while its close competitor Snapdeal, is valued at nearly $5 Bn. Though more and more Indians are opting to purchase goods through these firms, lured by incentives and discounts, the two giants are yet to become profitable. Incidentally, Flipkart recently crossed the 150 Mn products in sales last month.
According to Khosla, investors pump in millions in startups, hoping to make massive gains in future. With huge amounts of funds coming in their way, Khosla asked startups not to become overconfident. “Take the money that comes in your way, but do not get overconfident with the money. Examine the company, look for flaws as much as you look for trends.” he said.