Parent company Walmart infuses nearly $600 mn in e-commerce giant Flipkart

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E-commerce giant Flipkart has raised nearly $600 million in fresh funds from parent company Walmart and another investor, signalling a slow return of large deal momentum amid tight liquidity conditions and a global economic slowdown, according to people familiar with the matter. This is the first such major fundraise for the Bengaluru-based firm since 2021, when it raised $3.6 billion funding from investors including SoftBank and US retail giant Walmart, valuing the company at $37.6 billion.


According to the sources, the latest financing is likely to value the firm at about a 5-10 per cent premium to its previous valuation of $33 billion. The new valuation may cross $40 billion. Flipkart’s valuation had been adjusted to $33 billion after fintech firm PhonePe was separated from the group in December 2022. Industry sources said that Flipkart is in conversations with investors to raise a total funding round of about $1 billion.


“Flipkart has received $598.7 million in investment from its parent company, Walmart,” said a person familiar with the matter. “The company plans to deploy the capital to expand its infrastructure and seller support ecosystem and the latest technologies such as artificial intelligence and generative AI.”


Flipkart confirmed the fund infusion from Walmart but didn’t comment on the total capital the firm plans to raise.


This fundraise will give enough firepower to Flipkart to counter competition from Amazon, Mukesh Ambani-owned Reliance JioMart, and Tata Digital. It would also help the company tap the next 200 million customers in the country, especially in tier-2 and tier-3 cities and Bharat (rural India), according to the people familiar with the company strategy.


In 2021, Flipkart Group (including PhonePe) carved a niche for itself in the global league by raising $3.6 billion, including from SoftBank, which had exited the firm, valuing the company at $37.6 billion. In July 2020, Walmart led a $1.2-billion round in Flipkart, valuing the e-commerce firm at $24.9 billion. In May 2018, Walmart announced it would pay $16 billion for an initial stake of approximately 77 per cent in the homegrown e-commerce company, at a valuation of less than $21 billion. Fintech firm PhonePe came to Walmart as part of the acquisition. After that, Walmart continued to participate in the funding rounds of Flipkart and PhonePe.


Such financing is signalling a slow return of deal momentum amid tight liquidity conditions and a global economic slowdown, according to analysts. Flipkart’s funding round is one of the largest raised by a company in a single round for 2023. Udaan, India’s largest business-to-business (B2B) e-commerce firm, recently raised $340 million in Series E financing. Fintech firm PhonePe raised $850 million this year, which included a single round of $350 million from General Atlantic in January and subsequent funding of $100 million in May. Eyewear startup Lenskart raised $500 million from Abu Dhabi Investment Authority in March and $100 million from ChrysCapital in June. Ola Electric raised $380 million in October, although $240 million of this comprised debt.

A record 1.4 billion customers visited Flipkart’s platform during its flagship festival sales event “The Big Billion Days” (TBBD) 2023”. The event, which started on October 8 (with early access for VIP and Plus customers from October 7) and ended on October 15, received a great response from both customers and an extensive network of sellers across the country.


Major funding rounds in Flipkart (Source: Tracxn)


Flipkart has raised a total funding of $12 billion.


                   


Jul 2021: $3.6 bn (Series J), $37.6 bn valuation.


Sept 2020: $62.8 mn.


Jul 2020: $1.2 bn.


Aug 2018: $33.5 mn


Sept 2017: $156.0 mn


Aug 2017: 2.5 bn


Apr 2017: $1.4 bn (Series I), $10.1 bn valuation.


(Source: Tracxn)

First Published: Dec 21 2023 | 8:38 PM IST