Flipkart Valuation: Reaches $37.6 Billion in New Funding Round

Flipkart Secures $3.6 Billion Funding at $37.6 Billion Valuation

Flipkart announced on Monday the successful completion of a $3.6 billion funding round, resulting in a post-money valuation of $37.6 billion. This substantial investment is largely considered a pre-IPO round for the Indian e-commerce leader, as preparations for a public listing as early as next year are underway.

Details of the Funding Round

This funding round represents the largest ever secured by an Indian startup. It was spearheaded by GIC, the Canada Pension Plan Investment Board (CPP Investments), SoftBank Vision Fund 2, and Walmart. Additional investments were contributed by sovereign wealth funds including DisruptAD, Qatar Investment Authority, Khazanah Nasional Berhad, Tencent, Willoughby Capital, Antara Capital, Franklin Templeton, and Tiger Global.

Notably, this investment signifies the return of SoftBank as a Flipkart shareholder. Having previously exited the company in 2018 when Walmart acquired a majority stake at a $22 billion valuation, SoftBank has reinvested approximately $500 million in this new round.

Company Statements and Future Focus

Kalyan Krishnamurthy, Chief Executive Officer of Flipkart Group, stated the company’s dedication to transforming India’s consumer internet landscape and enhancing access and value for consumers. He emphasized that the investment demonstrates confidence in India’s digital commerce potential and Flipkart’s ability to maximize it for all stakeholders.

Flipkart intends to prioritize accelerating growth for small and medium-sized Indian businesses, including local kiranas. Continued investment in new product categories and the utilization of domestically developed technology will be central to enhancing consumer experiences and building a world-class supply chain.

Employee Stock Option Liquidity

As part of this funding, Flipkart is offering its employees the opportunity to sell stock options valued at $80.5 million, as communicated by Krishnamurthy on Monday.

Initial Fundraising Plans and Competitive Landscape

Originally, Flipkart initiated fundraising efforts earlier in the year, initially aiming to raise around $1 billion, as first reported by TechCrunch.

The company maintains a strong competitive position against Amazon within the Indian market. Amazon has already invested over $6.5 billion in the South Asian region.

Challenges and New Entrants

Both Flipkart and Amazon face challenges in expanding their presence in India, where traditional brick-and-mortar stores still dominate retail sales. They are also anticipated to be impacted by India’s evolving e-commerce regulations.

JioMart, a joint venture between Reliance Retail and Jio Platforms (backed by Google and Facebook), represents a new competitor. Launched last year, JioMart is now operational in over 200 cities and towns nationwide.

Market Growth and Potential

The Indian e-commerce market is experiencing rapid growth and is projected to expand further with increasing internet adoption. Bain & Company estimates that India’s e-commerce market will reach over 300 million shoppers by 2025.

These shoppers are expected to generate over $100 billion in online sales, according to the firm’s projections.

Strategic Initiatives

In recent years, both Flipkart and Amazon have implemented various strategies to broaden their reach in India. These include support for the Hindi language (with Flipkart adding several other Indian languages) and partnerships with local neighborhood stores.

Walmart’s Continued Support

Judith McKenna, President and CEO of Walmart International, affirmed Flipkart’s strong business fundamentals and its growth potential, mirroring the overall trajectory of India. This sentiment underscores Walmart’s continued investment in the company.

Flipkart’s Current Reach and Infrastructure

Flipkart currently boasts over 350 million registered users across its platforms, including the fashion e-commerce platform Myntra. Its logistics arm, Ekart, employs over 100,000 individuals and delivers to more than 90% of India’s addressable pin codes.

Furthermore, Flipkart has ventured into the social commerce space with the launch of Shopsy, aimed at fostering local entrepreneurship. Strategic investments in warehouse infrastructure remain a core strength for the group.