India’s e-commerce giant Flipkart raises $3.6 billion in fresh funds

India's e-commerce giant Flipkart raises $3.6 billion in fresh funds

Flipkart, India’s e-commerce behemoth, announced on Monday that it has raised $3.6 billion in new funding from a variety of worldwide investors, including governmental funds, private equity, and foundations, as well as its parent company, Walmart.

Singapore sovereign wealth fund GIC, the Canada Pension Plan Investment Board, SoftBank Vision Fund 2 and Walmart lead the fresh round of fundraising.

It also featured investments from sovereign funds such as the Qatar Investment Authority, Malaysia’s Khazanah Nasional Berhad, and DisruptAD, the Abu Dhabi sovereign fund ADQ’s venture arm.

Tencent of China, Franklin Templeton, and Tiger Global were among the other backers.

“This investment by major global investors underlines their conviction in Flipkart’s capabilities to maximize this potential for all stakeholders,” said Kalyan Krishnamurthy, Flipkart’s CEO.

He said the company will focus on assisting millions of small and medium-sized Indian businesses, including as modest family-owned grocery stores known as “kiranas,” develop, and that it will continue to invest in new categories and indigenous technologies.

SoftBank had sold its Flipkart stock to Walmart in 2018, and the company’s comeback coincides with rumours that the Indian firm is considering listing possibilities. According to the company’s statement, Flipkart now has a post-money worth of $37.6 billion.

Other Indian IT start-ups that the Japanese giant has financed include digital payments business Paytm, inexpensive hotel rooms start-up Oyo, and ride-sharing startup Ola, among others.

In a statement, Lydia Jett, a partner at SoftBank Investment Advisers, stated, “SoftBank’s re-investment in Flipkart is driven by our experience with and conviction in the company’s management team to continue addressing the requirements of the Indian consumer in the decades to come.”

Although brick-and-mortar establishments account for the majority of India’s retail sales, the country’s online potential is enormous: India has one of the world’s fastest-growing and largest internet populations.

Some transactions have switched online in recent years as a result of a combination of changes, a push toward digitization, and last year’s coronavirus outbreak — and accompanying national and regional lockdowns.

According to a joint analysis from Unicommerce and Kearney, India’s e-commerce sector expanded 36 percent year over year in terms of volume and 30 percent year over year in terms of value in the last three months of 2020.

When compared to a year before, the personal care, beauty, and wellness category rose 95 percent, while fast-moving consumer goods and health care grew 46 percent. According to the research, the majority of the incremental growth was driven by a strong surge in e-commerce volume and value in India’s Tier 2 and Tier 3 cities.

Flipkart’s competitors include Amazon, the world’s largest e-commerce company, which has invested billions of dollars in India, as well as domestic names like JioMart, RIL’s online grocery delivery app from Reliance Industries.

The Indian government, for its part, is said to have suggested new e-commerce draft laws in June, which are expected to affect Flipkart and Amazon India.

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