Walmart, the world’s largest retailer, is increasing its stake in Flipkart by investing an additional $1.2 billion in the Indian e-commerce firm. The fresh equity round from Walmart, which bought the majority stake in Flipkart for $16 billion in 2018, values Flipkart at $24.9 billion after the investment, the companies said on Tuesday.
The funding is expected to help Flipkart take on the Jeff Bezos-led Amazon, with which it is in a fierce battle for dominance in India’s online retail market as well as competition from the Mukesh Ambani-led Reliance’s e-commerce venture JioMart.
The Flipkart Group said it closed the additional $1.2 billion equity round to support the continued development of its e-commerce marketplace as India emerges from the Covid-19 crisis. Besides Walmart, the investment is led by Flipkart Group’s majority owner, along with a group of existing shareholders and values the company at $24.9 billion post-money. It will be funded in two tranches over the remainder of the fiscal year.
“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,” Flipkart CEO Kalyan Krishnamurthy said. “Since Walmart’s initial investment in Flipkart, we have greatly expanded our offer 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 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.
Founded in 2007, the Flipkart Group includes Flipkart, digital payments platform PhonePe, fashion specialty site Myntra and eKart, a logistics and delivery service focused on solving the last mile in India’s Tier II and Tier III cities. In 2018, Walmart Inc invested $16 billion for a majority stake in the group at a valuation of $21 billion.
Flipkart recently surpassed 1.5 billion visits per month and reported a 45-per cent growth in monthly active customers and 30-per cent growth in transactions per customer for FY20. The company said it was democratising commerce by providing sellers and MSMEs access to a national market and by investing in technology such as voice assistants and local language interfaces to help make shopping easier for non-English speaking customers. Today, Flipkart offers 150 million products across more than 80 categories and has pioneered customer-centric services such as Cash-on-Delivery, No-Cost EMI and easy returns.