Flipkart's devaluation is a cyclical phenomenon: Accel

 Accel Partners India, a leading early stage venture funding company, said that the current valuation markdown of Flipkart is part of a cyclical phenomenon, and it is not planning for an early exit from the ecommerce giant.

Interacting with Deccan Herald, Accel Parnters India’s Subrata Mitra — a board member of Flipkart — said, every company will have to go through a cyclical change. “Like large companies, startups in India will have to undergo cyclical phases during their business journeys,” he said.

Accel, which owns about 20% stake in Flipkart, is the second largest investor in the company. Tiger Global is the largest investor in the company, followed by investors like DST Global, Singapore’s sovereign wealth fund GIC and ICONIQ Capital.

Mitra opined that startups, especially ecommerce ventures, should realise that they will have to bear with the environment. Besides Morgan Stanley Institutional Fund Trust lowering per-share value to $87.9 as of March 31, 2016 from $142.24 in June 2015, T Rowe Price also cut its value of its stake in Flipkart by 15%. Recently, mutural fund companies like Valic Co 1 and Fidelity Rutland Square Trust II marked down Flipkart’s value.

Accel, the first venture investor in Flipkart, remains the second-largest shareholder, next to New York-based hedge fund Tiger Global Management. Qatar Investment Authority purchased a fractional stake in Flipkart from Accel Partners for $100 million (about Rs 650 crore) in last November. Mitra said the company will continue to invest in three core areas in the country, which include consumer, mobile and software as a service (SaaS).

Commenting on investing in early startup in the country, he said it will help in building bigger organisations. “We will continue to invest in Indian companies and it is normally for long tenure. Our dilution of funds depends on the money that the company might raise in future as per the investment requirement,” he said.