Walmart is keen to bring in strategic investors in Walmart-Flipkart so that Flipkart can get additional expertise as well as consistent funding support as and when required to stay ahead in the country’s e-commerce competition
Walmart is considering raising USD 2-3 billion for its subsidiary Flipkart at a valuation of more than USD 40 billion to expand in India, said a news report quoting sources. In July last year, Flipkart raised approximately USD 3.6 billion. It is estimated that about USD 700-800 million of this capital remains.
“Walmart is keen to bring in strategic investors in Walmart-Flipkart so that Flipkart can get additional expertise as well as consistent funding support as and when required to stay ahead in the country’s e-commerce competition,” sources said requesting anonymity.
As part of Walmart’s latest fundraising plan, investment bankers will seek out strategic partners and large global investors. It is estimated that Flipkart’s current value is over USD 40 billion, and it may dilute around 7 percent if it raises as much as USD 3 billion, according to those cited above. The e-commerce firm carried out its first capital infusion round in July last year, valued at around USD 37 billion since Walmart acquired a 77 percent stake for USD 16 billion in 2018.
The planned fundraising will help Flipkart build a war chest to compete with aggressive rivals Amazon India, Reliance Industries’ Jio Mart, and the Tata group. Among the investors in Flipkart’s last funding round were the Canada Pension Plan Investment Board, GIC, SoftBank Vision Fund 2, and Walmart, the parent company of Flipkart. Qatar Investment Authority, Khazanah Nasional Bhd, DisruptAD, Tencent, Franklin Templeton, and Tiger Global also participated.
Since Walmart acquired Flipkart, the company has expanded to newer locations in India and added new product categories. Flipkart now sells a full range of groceries and furniture on its platform, for example. New warehouses have also been added by the e-commerce company to facilitate faster delivery.
In addition to offering Flipkart Pay Later services, Flipkart has also opened a research and development (R&D) centre in Israel since acquiring Israeli startup Upstream Commerce.
