Flipkart Raises $1.2 Billion in Fresh Funding From Walmart, Existing Investors

Flipkart on Tuesday closed an additional $1.2 billion (roughly Rs. 9,048 crores) equity round led by its majority owner and US e-commerce giant Walmart. The fresh investment values the Bengaluru-based company at a whopping, $24.9 billion (roughly Rs. 1.87 lakh crores). Newly raised funds will be infused in two portions over the remainder of the fiscal year, the company said. The new funding comes over two years after Walmart acquired 77 percent controlling stake in Flipkart at $16 billion back in May 2018.

Alongside Walmart, the latest equity round has the involvement of Flipkart's existing investors. The company, however, didn't reveal the names of those investors.

The fresh funding will be used to bolster Flipkart's presence in India's e-commerce market that has Amazon as a strong contender and Reliance Jio as the next big entity.

“Flipkart continues to leverage its culture of innovation to accelerate growth and enable millions of customers, sellers, merchants and small businesses to prosper and be a part of India's digital transformation,” said Judith McKenna, President and CEO of Walmart International, in a statement.

Walmart's latest funding comes amid Jio's growing interest in the Indian e-commerce market. The company owned by Indian oil-to-telecoms conglomerate Reliance Industries brought JioMart earlier this year as its initial move to enter the market that is expected to reach a $200 billion size by 2026 from $38.5 billion in 2017, according to an estimation by the India Brand Equity Foundation. Further, it has attracted investments from major tech and PE firms including Facebook, Silver Lake, Intel, and the latest, Qualcomm Ventures. Google is also reported to have plans to invest around $4 billion into Jio Platforms to step into the bandwagon that would compete against Flipkart as well as Amazon in the coming future.

Having said that, Flipkart is already a solid competitor against Amazon with 45 percent growth in monthly active customers and 30 percent growth in transactions per customer reported for the financial year 2020. The company is claimed to have a portfolio of 150 million products across over 80 categories. It also recently expanded local language support on its platform to persuade new customers.

“Since Walmart's initial investment in Flipkart, we have greatly expanded our offer through technology, partnerships and new services,” said Kalyan Krishnamurthy, CEO, Flipkart, in a statement. “We will continue innovating to bring the next 200 million Indian shoppers online.”

In addition to Flipkart's e-commerce presence, the company has PhonePe as its digital payments solution to counter the likes of Google Pay and Alibaba Group-backed Paytm. The PhonePe app recently reported annualised total payments value (TPV) of $180 billion on more than 500 million monthly transactions.

Last week, Amazon India unit also received Rs. 2,310 crores in fresh funds from its US parent to strengthen its business in the country.

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