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The Flipkart Group on Tuesday closed an additional $1.2-billion equity round to support the continued development of its e-commerce marketplace, as India emerges from the Covid-19 crisis. The investment, led by Walmart, Flipkart Group’s majority owner, along with a group of existing shareholders, values the company at $24.9 billion post-money. It will be funded in two tranches over the remainder of 2020-21.
Flipkart was last valued at $21 billion when Walmart acquired a 77 per cent stake in the company for $16 billion in May 2018.
“We’re grateful for the strong backing of our shareholders as we continue to build our platform and serve the growing needs of Indian consumers during these challenging times,” said Flipkart CEO Kalyan Krishnamurthy, in a statement.
“Since Walmart’s initial investment in Flipkart, we have greatly expanded our offerings through technology, partnerships and new services. Today, we lead in electronics and fashion, and are rapidly accelerating share in other general merchandise categories and grocery, all the while providing increasingly seamless payment and delivery options for our customers. We will continue innovating to bring the next 200 million Indian shoppers online,” he said.
This fresh infusion of funds comes in the wake of competition hotting up in the e-commerce ecosystem with investments and commitments made by global giants, including Facebook’s investment of ₹43,574 crore in Reliance’s Jio platform; Amazon’s commitment to invest $1 billion in India and exporting $10 billion worth of products from India by 2025, and, more recently, Google’s investment commitment of $10 billion in India over the next 5-7 years.
Online buying opportunity
Anil Kumar, founder CEO, RedSeer Consulting said: “Most of the funds raised in this round will go into Flipkart’s e-commerce business. On the one hand, Flipkart will use the money to build on the huge opportunity that Covid-19 has presented to e-commerce as online buying has risen by 20 per cent compared to pre-Covid levels as of mid-June and is now well over 20 per cent.
“On the other, Flipkart will deploy the money to double down on investments in Tier 2 markets where it has traditionally been strong to ward off imminent threat from Jio.”
“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. “Kalyan and team have a clear vision and are relentlessly focused on giving Indians frictionless choice in how they shop and sell online. We’re excited to see what the future holds as they continue their journey to become India’s most trusted e-commerce marketplace.”
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