- Flipkart has raised $62.8 Million from China-based gaming and social media giant Tencent. It comes at a time when the Chinese investments are under fire in India.
- Earlier, Flipkart had raised $1.2 Billion in July in a round led by the parent organization Walmart along with other existing shareholders at a $24.9 Bn valuation.
- In July this year, Flipkart also acquired its parent company Walmart’s B2B wholesale store, Best Price Modern Wholesale, to launch its own service ‘Flipkart Wholesale’.
E-commerce giant Flipkart has raised $62.8 Million from China-based gaming and social media giant Tencent as an extension of its $1.2 Bn funding round, according to filings sourced by paper.vc.
Tencent will now own about 4 to 5.3% stake in Flipkart Pte, which is the online retailer’s Singapore-based holding, while Walmart had increased its stake to about 82%.
"There is the possibility though that Tencent's investment is the first money in as part of this larger round involving Walmart and other shareholders," said the report.
Though this is a small investment in the e-commerce giant, it comes at a time when the Chinese investments are under fire in India. As a result, ByteDance lost its largest market for TikTok, Helo, and other apps.
Several Tencent-owned gaming apps, including PUBG, have been banned in India as well. Shenzhen-based tech conglomerate Tencent’s shares fell more than 2% or lost $14 Bn in intra-day trade after the ban.
Earlier, Flipkart had raised $1.2 Bn in July in a round led by the parent organization Walmart along with other existing shareholders at a $24.9 Billion valuation. The company had noted that the fresh fundraise will be used to support Flipkart’s recovery from the Covid-19 crisis
The Indian government has also updated its foreign direct investment (FDI) guidelines to set up a screening process for all investments coming in from the neighboring countries, especially China. However, Flipkart will get away with this regulation since the investment is in its Singapore-based holding.
Singapore has been a safe haven for many Indian companies including Flipkart who are registered there to overcome tax hurdles and the country is also increasingly becoming a gateway for Chinese companies into the South East Asian region.
“Since Walmart’s initial investment in Flipkart, we have greatly expanded our offer through technology, partnerships, and new services. We will continue innovating to bring the next 200 Mn Indian shoppers online,” Flipkart CEO Kalyan Krishnamurthy said.
Earlier in July, Flipkart also acquired its parent company Walmart’s B2B wholesale store, Best Price Modern Wholesale, to launch its own service ‘Flipkart Wholesale’ in a bid to expand its presence in the food and retail segment. Walmart India employees will join Flipkart Group and the home office team will integrate over the next year.
Flipkart was founded in 2007 by Binny Bansal and Sachin Bansal, but was acquired by Walmart back in 2018. After the acquisition, the founders went on to start their own ventures. Binny Bansal started xto100x, while Sachin Bansal started with Navi Technologies.
The Flipkart Group includes the e-commerce venture Flipkart, fashion retailer Myntra and a logistics and delivery service eKart. Digital payments giant PhonePe was a part of the group as well but was established as a separate entity last year.