Flipkart's Billion-Dollar Boost, Walmart to Commit 600 Million Dollar in Mega Funding Round
Flipkart's $1B Fundraise Signals Big Moves and New Investors
22 December 2023
Flipkart is in talks to secure $1 billion in fresh capital, with Walmart, its major shareholder, committing $600 million, aiming to strengthen its financial position and potentially increase its valuation by 5-10 percent.
Walmart's commitment to Flipkart began with a 77 percent stake acquisition in 2018 for $16 billion. Recent investments, including the purchase of additional stakes, solidified Walmart's position in Flipkart, though the exact ownership percentage remains undisclosed.
Despite deferring its IPO to 2023, Flipkart has raised its targeted IPO valuation to $60-70 billion.
In a significant development for the Indian e-commerce giant, Flipkart is currently in talks to secure a substantial $1 billion in fresh capital, with Walmart, its largest shareholder, committing a noteworthy $600 million to the cause. This infusion of funds is not only expected to strengthen Flipkart's financial position but also attract new investors, potentially leading to a 5-10 percent increase in the company's valuation from its current $33 billion.
Walmart's commitment to Flipkart dates back to its acquisition of a 77 percent stake in the company for $16 billion in 2018. The American retail giant's involvement in Flipkart has steadily grown, with recent investments including the purchase of remaining stakes from Tiger Global and Accel for $1.4 billion. This move consolidated Walmart's hold on Flipkart, though the exact percentage of ownership post-purchase remains undisclosed.
As part of its India strategy, Walmart has pledged to import goods worth $10 billion annually from the country by 2027. Flipkart, on the other hand, has been focusing on smaller towns and cities, deferring its initial public offering (IPO) to 2023. The company internally raised its targeted IPO valuation to a range between $60 billion and $70 billion, showcasing its ambitious growth plans.
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The $600 million funding from Walmart is not the only financial engagement; it follows a series of strategic moves, including a $750-million one-time payout for Flipkart employees and contributions to the Indian government for PhonePe's funding. PhonePe, a subsidiary of Flipkart, received significant attention, with Walmart directing funds toward its growth and making major tax payments for its domicile in India.
Flipkart's existing investor base includes prominent names like Canada Pension Plan Investment Board (CPP Investments), GIC (Singapore government's sovereign wealth fund), SoftBank Vision Fund 2, and Qatar Investment Authority. These stakeholders, along with some external investors, are expected to contribute the remaining $400 million in the ongoing round of fundraising.
This fresh fundraise comes on the heels of previous transactions involving early investors such as Accel, Tiger Global, Franklin Templeton, and others selling their Flipkart shares to Walmart. Despite the evolving investor landscape, Flipkart has actively diversified its portfolio over the past year, expanding into new categories such as travel, e-pharmacy, and at-home services, showcasing its commitment to staying at the forefront of the evolving e-commerce landscape.