Flipkart eyes $2.5B pre-IPO funding round
What's the story
Flipkart, the leading Indian e-commerce platform owned by Walmart, is looking to raise between $2 billion and $2.5 billion in a pre-IPO funding round, according to Moneycontrol. The company has been in talks with several investors across the globe including those in Singapore, the US, and London. If successful, this would be Flipkart's second major private market fundraise within two years after Google's $350 million investment in May 2024.
Investor meetings
Engaging with global and Indian banking heads
Flipkart's top executives, including CEO Kalyan Krishnamurthy, have held talks with leading global bankers such as Goldman Sachs, JP Morgan, Bank of America (BofA), and Citigroup. The talks were part of a broader strategy to explore private market fundraising options alongside IPO discussions. They have also met heads of major Indian banks like Axis Bank, JM Financial, and Kotak Mahindra Bank to gage investor interest in this potential funding round.
Stakeholder consent
Walmart's approval crucial for fundraising efforts
Walmart, which owns over 80% of Flipkart, will have to approve any fundraising efforts. This is particularly important as there are concerns that Walmart may not want to dilute its stake in the company. Despite these uncertainties, Krishnamurthy has been meeting investors globally to gage their interest in a potential private fundraise.
Market position
Last funding round and potential IPO timeline
Flipkart was last valued at $36 billion during its fundraising from Google in May 2024. If the company raises funds privately at a higher valuation, it would be beneficial for Walmart as well. It would show an increase in value over the years and set a valuation benchmark for Flipkart going forward. Krishnamurthy has hinted that the Flipkart group will go public within 12-18 months, possibly giving an exit to later-stage investors.
Business growth
Financial performance and future plans
Despite a net loss of ₹1,494.2 crore in FY25, Flipkart's revenue from operations grew 14.4% to ₹20,493.3 crore from ₹17,907.3 crore a year earlier. The growth was driven by an increase in ad income. Flipkart is also planning to invest more in Minutes, its 10-minute rapid delivery service, and double its warehouse count to capture some market share from competitors like Blinkit and Swiggy's Instamart among others.