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Flipkart Raises $3.6 Billion at $37.6 Billion Valuation

Walmart acquired 77% of Flipkart for $16 billion in 2018.

Video source: YouTube, Yahoo Finance

Indian e-commerce company The Flipkart Group announced Monday it has raised $3.6 billion in a new funding round, its first capital infusion from external investors since US retail giant Walmart Inc acquired 77% of the business for $16 billion in 2018. 

Canada Pension Plan Investment Board (CPP Investments), GIC (Singapore's sovereign wealth fund), SoftBank and Walmart led the round, with participation from existing backers like Qatar Investment Authority.

Sovereign funds DisruptAD, Qatar Investment Authority and Khazanah Nasional Berhad along with Tencent, Willoughby Capital, Antara Capital, Franklin Templeton and Tiger Global also participated in the round.

Flipkart is valued at over $37.6 billion post-money, up from $24.9 billion last year when it raised $1.2 billion in an internal round led by Walmart. Three years ago, the business was valued at $22 billion, The Economic Times noted. 

“At Flipkart, we are committed to transforming the consumer internet ecosystem in India and providing consumers access and value. This investment by leading global investors reflects the promise of digital commerce in India and their belief in Flipkart’s capabilities to maximize this potential for all stakeholders,” Kalyan Krishnamurthy, Flipkart’s chief executive officer, said in a statement.

“As we serve our consumers, we will focus on accelerating growth for millions of small and medium Indian businesses, including kiranas [small, family-owned groceries]. We will continue to invest in new categories and leverage made-in-India technology to transform consumer experiences and develop a world-class supply chain,” he said.

Flipkart will also give its employees the option to sell their stock options worth $80.5 million, Krishnamurthy said.

Monday’s investment also marks the return of SoftBank as a shareholder of Flipkart.

Japan-based Softbank, which sold its stake in the start-up to Walmart in 2018 at a valuation of $22 billion, reinvested about $500 million in the new round. 

The latest fundraising round could set up Flipkart for an initial public offering in the US next year, Bloomberg News reported. 

According to Reuters, the Bengaluru-based company is aiming for a $50 billion valuation for its public listing and has had talks with a special purpose acquisition company (SPAC) in the US regarding a deal.

“Flipkart is a great business whose growth and potential mirrors that of India as a whole — that’s why we invested in 2018 and why we continue to invest today,” Judith McKenna, Walmart International’s president and chief executive officer said in a statement.

After Walmart bought its majority stake in Flipkart three years ago, it added more product categories and increased its warehouse facilities, Reuters reported.

The platform, which has more than 350 million registered users, said it has been focused on “key categories,” such as fashion, travel and grocery, that “reflect India’s maturing digital commerce industry.”

CNBC noted that India has one of the fastest-growing and largest internet populations in the world. 


Source: Equities News

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