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Indian e-commerce company Flipkart has raised $ 3.6 billion in funding for a valuation of $ 37.6 billion, with major shareholder Walmart leading the round along with SoftBank and Singapore GIC’s sovereign wealth fund.
Flipkart faces Amazon and India’s richest man, Mukesh Ambani, president of Reliance Industries, for the country’s middle-class consumers, who are quickly getting online in the era of cheap data and after the pandemic.
The final round of fundraising comes when Flipkart, backed by Walmart, is considering making itself public and New Delhi is trying to tighten e-commerce regulations. New rules propose to limit “flash sales” and could force Flipkart and Amazon to change their business structure again.
The draft rules, published in June, come at a time when the government of Prime Minister Narendra Modi is locked in a battle with Big Tech on issues ranging from foreign investment to free speech. The government has been a challenge Twitter and Facebook on controlling and moderating online content.
Flipkart said in a statement that the Investment Board of the Canada Pension Plan, the sovereign wealth fund Qatar Investment Authority and Tencent participated in the fundraising round. Walmart now has a stake of approximately 74% in Flipkart, according to people familiar with the transaction.
“This investment by the world’s leading investors reflects the promise of digital commerce in India,” said Kalyan Krishnamurthy, executive director of Flipkart Group. “We will focus on accelerating the growth of millions of small and medium-sized Indian businesses.”
SoftBank reinvested $ 500 million in Flipkart three years after it fully came out and sold its approximately 20% stake in Walmart. Lydia Jett, a partner at SoftBank Investment Advisers, said SoftBank’s decision was driven by Flipkart’s ability to meet the “needs of the Indian consumer in the coming decades”.
Flipkart said it had more than 350 million registered users and 300,000 registered vendors, most from “second-tier” cities on the Indian peninsula, where the emerging middle classes that companies are trying to target are located. .
The group also owns PhonePe, one of India’s leading payment apps, which competes against Paytm’s domain and Google Pay from India.
Amazon and Reliance have also been replenishing their war chests. Reliance Retail, the Reliance Group’s retail group, raised more than $ 6 billion last year to help fuel its e-commerce expansion.
Analysts predict that Flipkart could plan a IPO for next year, following in the footsteps of other Zomato and Paytm brands, which will be made public in the coming months.
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