Flipkart raises $3.6 billion at $37.6 billion valuation

Flipkart raised $3.6 billion as part of a new funding round led by parent Walmart Inc. and returning investor SoftBank Group Corp., valuing the IPO-bound online retailer at $37.6 billion.

Several marquee investors, including Singapore’s GIC Pte, China’s Tencent Holdings Ltd, Canada Pension Plan Investment Board (CPP Investments), Abu Dhabi’s DisruptAD, Qatar Investment Authority, Malaysia’s Khazanah Nasional Bhd, Willoughby Capital, Antara Capital, Franklin Templeton, and Tiger Global also participated in the round, Flipkart said on Monday.

The latest round comes a year after the e-commerce company received capital commitments of $1.2 billion from Walmart, along with a group of existing shareholders. Since its launch 14 years ago, Flipkart has raised more than $10.8 billion, shows data from research firm Tracxn.

Earlier in June, Mint reported that SoftBank Group was in talks with Flipkart to invest $700 million in the online retailer, three years after it sold its entire stake in the company to Walmart. “This investment by leading global investors reflects the promise of digital commerce in India and their belief in Flipkart’s capabilities to maximize this potential for all stakeholders. As we serve our consumers, we will focus on accelerating growth for millions of small and medium Indian businesses, including kiranas. We will continue to invest in new categories and leverage made-in-India technology to transform consumer experiences and develop a world-class supply chain,” said Kalyan Krishnamurthy, chief executive officer, Flipkart Group.

Flipkart also initiated an employee stock ownership plan (ESOP) buyback worth ₹600 crore as a part of the fundraising. According to a company spokesperson, close to 5,600 Flipsters, as the company calls its staff, will be eligible for this buyback, allowing them to liquidate up to 5% of their three-year-old vested options.

In an internal memo on Monday, Krishnamurthy said the firm, having achieved many ‘firsts’, must introduce the value proposition of digital commerce to the next 200 million Indians.

Mint has reviewed a copy of the memo.

“Flipkart is a great business whose growth and potential mirrors that of India as a whole —that’s why we invested in 2018 and why we continue to invest today,” said Judith McKenna, president and CEO– Walmart International. “The quality of the investor group and valuation announced today is further confirmation of global confidence in Flipkart.”

Flipkart will also leverage the investment to bring more informal small businesses to the digital fold. Through its expanding grocery and last-mile delivery programmes, Flipkart Group will also work toward digitizing kiranas, it said in a statement.

As part of this round, CPP Investments has infused $800 million in the e-commerce entity.

The e-commerce entity currently works with more than 1.6 million kiranas through its wholesale business and its last-mile delivery programme.

The Flipkart Group claims to engage with more than 350 million registered users and counts online fashion marketplace Myntra and logistics arm Ekart as group firms. “The opportunity to meet consumer demand for high-quality selection at low prices and a young population make online consumption critical to India’s quest for the ‘$5 trillion economy’ that Flipkart’s growth story has been enabling,” said Lydia Jett, partner, SoftBank Investment Advisers.