#FundingAlert: Flipkart raises $3.6 billion in fresh funding
What's the story
Walmart-owned e-commerce giant Flipkart has successfully raised $3.6 billion in fresh funding from global investors, sovereign funds, and private equity firms, as well as by Walmart itself. The post-money valuation of the Flipkart Group including subsidiaries Flipkart, Myntra, PhonePe, and Ekart stands at $37.6 billion as it prepares to go public in the US in the coming year. Here are more details.
Financial investors
Fresh investment gives Flipkart firepower to compete with rivals
The fresh round of investment has given the company founded by Sachin and Binny Bansal significant financial resources to take on the likes of Amazon Inc., Reliance Industries, and the Tata Group. Financial investors funding the company include GIC, Canada Pension Plan Investment Board (CPP Investments), SoftBank Vision Fund 2, and Flipkart's largest current shareholder—Walmart.
Details
Flipkart's valuation has seen steady year-on-year increase
Sovereign funds participating in the round include DisruptAD, Qatar Investment Authority, and Khazanah Nasional Berhad. Marquee investors like Tencent, Willoughby Capital, Antara Capital, Franklin Templeton, and Tiger Global also participated. The current valuation of $37.6 billion reflects an increase from last year's $24.9 billion valuation. The company also raised $1.2 billion in an internal round led by Walmart last year.
SoftBank rejoins
Company plans to buy back employee share portions as well
The Economic Times reported that Flipkart will also buy back employee shares worth over $80 million, liquidating funds for those who own ESOPs (Employee Stock Ownership Plans). Meanwhile, Walmart continues to hold a 74 to 75 percent stake in Flipkart after the funding. The latest investment round also marks the return of SoftBank to the cap table since the Japanese firm exited in 2018.
Using the funds
Flipkart will use investment to establish stronger footing in e-commerce
Notably, Flipkart plans to use the fresh capital to expand operations and gain market share in the e-commerce market in India that's witnessing a boom fuelled by the COVID-19 pandemic. Flipkart Group CEO Kalyan Krishnamurthy said, "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."
CEO speaks
Flipkart will continue to develop a world-class supply chain: Krishnamurthy
Krishnamurthy added, "As we serve our consumers, we will focus on accelerating growth for millions of small and medium Indian businesses, including Kiranas (corner stores)." The CEO said that the Flipkart Group will continue to invest in new categories and leverage technology made in India to "transform consumer experiences and develop a world-class supply chain."