Amazon rival Flipkart to raise $1 billion in fresh round; Walmart to invest $600 million

Walmart, the US-based retail giant, has committed an additional $600 million investment in Flipkart, an Indian e-commerce giant which battles with Amazon. 

The move is part of a larger $1 billion funding round that Flipkart is currently raising. Walmart, which owns over 80% of Flipkart, increased its ownership in the company earlier this year after acquiring existing investors' stakes. 

"During the six months ended July 31, 2023, the Company paid $3.5 billion to acquire shares from certain Flipkart noncontrolling interest holders and settle the liability to former noncontrolling interest holders of PhonePe," the company earlier informed in a SEC filing.

At what valuation?

According to multiple media reports, the latest investment is expected to increase Flipkart's valuation by 5-10%, from its current $33 billion, although this still falls short of its nearly $38 billion valuation in 2021.

In May 2018, Walmart acquired a 77% stake in Flipkart for $16 billion, valuing the company at $22 billion. From 2018 to the present, Flipkart's valuation increased by approximately 50%.

Hiving off PhonePe

Flipkart, which acquired PhonePe in 2016, hived off the fintech giant, as a separate entity, in 2020. Following this, the company raised over $700 million in funding from a clutch of investors, including Walmart, at a valuation of $5.5 billion.

What is the purpose of fundraising?

Flipkart plans to use this fresh injection of capital to expand operations, enhance supply chain and tech capabilities, and prepare for a potential IPO. The company has delayed its IPO plans to 2023 and is reportedly targeting a valuation between $60-$70 billion for the public offering.

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