Walmart-Owned Flipkart Raises USD 3.6 Billion In Funding, Now Values At 37.6 Billion

Flipkart has announced that it will increase investments in technology, supply chain, and infrastructure as it focuses on categories such as fashion, travel, and groceries.

Mumbai: Walmart-owned Flipkart has raised $3.6 billion in the new caption from its promoters and investors, SoftBank Group Corp, valuing the e-commerce firm at $37.6 billion, more than double the amount, for which US retail giant bought a 77 percent stake in 2018.

The investors in the latest funding include financial investors GIC, Canada Pension Plan Investment Board (CPP Investments), SoftBank Vision Fund 2, and Walmart, along with investments from sovereign funds DisruptAD, Qatar Investment Authority, Khazanah Nasional Berhad, and marquee investors Tencent, Willoughby Capital, Antara Capital, Franklin Templeton, and Tiger Global.

Commenting on the deal, Kalyan Krishnamurthy, Chief Executive Officer, Flipkart Group, said, "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."

Like its rival Amazon, Flipkart began by selling books but quickly expanded into selling smartphones, clothing, and other items. After the acquisition by Walmart, Flipkart expanded to many small towns and cities, added more items such as furniture and groceries to its online store, and increased its warehouses to compete with Amazon.com's India unit.

SoftBank of Japan, which previously backed Flipkart before selling its 20 percent stake to Walmart for a tidy profit, has returned as a shareholder. 

"SoftBank's re-investment in Flipkart is driven by our experience with and conviction in the company's management team to continue addressing the needs of the Indian consumer in the decades to come," Lydia Jett, Partner, SoftBank Investment Advisers, said.

Investors are pouring billions of dollars into India's consumer internet and software-as-a-service startups, which are thriving despite the COVID-19 pandemic.

Walmart has carved the payments arm PhonePe from Flipkart, a unit that could be worth close to $10 billion as the parent firm plans for Flipkart's initial public offering (IPO), valuing the e-commerce firm at over $50 billion. The latest round of funding could pave the way for Flipkart to go public in the United States in 2022, said analysts. 

Flipkart, which has over 350 million registered users, has announced that it will increase investments in technology, supply chain, and infrastructure as it focuses on categories such as fashion, travel, and groceries.

"As we serve our consumers, we will focus on accelerating growth for millions of small and medium Indian businesses, including kiranas. 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," said Krishnamurthy.

Rapid smartphone adoption and low-cost mobile data in India have fueled digital startups selling everything from groceries and cosmetics to smartphones and vacations. 

Several prominent Indian startups have also announced plans to go public to capitalize on foreign funds' liquidity. Food delivery startup Zomato, payment services PayTM, beauty brand Nykaa, and ride-hailing app Ola are closely watched.

"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," said Judith McKenna, President, and CEO – Walmart International.