Flipkart Valued at $37.6-Billion After $3.6-Billion in Latest Funding Round

Indian e-commerce firm Flipkart said on Monday it has raised $3.6 billion in a funding round led by GIC, SoftBank Vision Fund 2, and its biggest shareholder Walmart, valuing the online retailer at $37.6 billion post-money as it continues to expand and advance its network in the country. Walmart Inc. was founded by Samuel Moore Walton and James Lawrence Walton in 1945 and has a market capitalization of $393 billion as of July 12, 2021.

Flipkart in a statement said that the fundraise attracted global investors such as Tencent Holdings, Blackstone Group-backed Antara Capital, and several sovereign wealth and pension funds, including Qatar Investment Authority, Khazanah Nasional Berhad, and Canada Pension Plan Investment Board also participated in the funding round. Kalyan Krishnamurthy, CEO at Flipkart Group, said in a statement: “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.”

The fresh funding round is reportedly a boon for the e-commerce firm and Walmart, which bought a majority stake in the Indian firm three years ago for $16 billion and is working toward an initial public offering (IPO) for the business. Sources told Bloomberg that since the deal, Walmart carved out the platform’s digital payments unit PhonePe from Flipkart, a business that could be valued at close to $10 billion.

The Bengaluru-based online retailer is eyeing a valuation of up to $50 billion in its highly anticipated public offering that could take place next year, said a Reuters report. The demand for e-commerce services surged last year when the COVID-19 hit pushing more shoppers online as access to products safely and conveniently became a priority. With more than 350 million registered users from across India, Flipkart said that it will increase investments in technology, supply chain, and infrastructure as it focuses on categories such as fashion, travel, and groceries. Last month, Abu Dhabi’s sovereign fund ADQ was reportedly in discussions to invest about $500 million in Flipkart.

“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, President, and CEO – Walmart International, said in a statement. “India e-commerce is expected to reach $99 billion by 2024, growing at a 27% CAGR over 2019-24, with grocery and fashion/apparel likely to be the key drivers of incremental growth,” Ernst & Young said in June.

Amazon, Reliance Retail, BigBasket, and Flipkart are fighting to get a slice of India’s estimated $1 trillion retail markets, where online shopping has been witnessing robust growth. Just like its rival Amazon, Flipkart began by selling books but has since diversified into sell selling smartphones, clothing, grocery, and other household goods. In March, India’s homegrown e-commerce firm said that it had expanded its grocery sales to more than 50 Indian cities, in an apparent move to compete with its arch-rivals — Amazon and Reliance — effectively.

Flipkart’s expansion gave its grocery services access to big cities, including Kolkata, Pune, and Ahmedabad. Last October, Flipkart invested $204 million in Aditya Birla Fashion and Retail as the e-commerce giant bolstered its presence in one of the world’s fastest-growing retail markets.