Walmart pumps $600Mn in Flipkart as part of $1Bn fundraise
Flipkart, the now Walmart owned Indian e-commerce giant, has reportedly moved closer to its aim of securing a substantial $1 billion in a fresh fundraise. Walmart itself has reportedly infused $600Mn out of the said $1Bn, signalling a continued wave of massive investment that India’s ecommerce sector continues to raise, despite economic headwinds elsewhere. The funding is expected to fuel operational expansion and technological enhancement, and the remaining $400 million is expected to be pumped in by other internal stakeholders and a few external investors.
At the core of this funding endeavour is Walmart’s commitment to Flipkart’s growth trajectory. Having acquired an ownership stake in the company in 2018, Walmart’s promise of the substantial $600 Mn increases its holding in Flipkart to an impressive 80.5%. Walmart had acquired an ownership stake of 77% in the e-commerce powerhouse for a monumental $16 billion. Earlier this year, it bought out Tiger Global and VC firm Accel’s remaining stakes in Flipkart for a total off $1.4 billion.
The proceeds from the newest fundraise – Flipkart’s first since 2021 – is expected to fortify the firm’s the supply chain, as well as upgrade its technological capabilities. It will also allow Flipkart to deepen its presence in the country, as well as drive investments in new fulfilment centres and on financial services. This operational fortification strategy also aligns with the industry trend of prioritizing logistical efficiency and improved delivery timelines.
The newest fundraise also prompts a closer look at the valuation dynamics surrounding Flipkart. With expectations of a premium valuation, perhaps in the range of 5-10% above its previous valuation of $33 billion, the company navigates through a nuanced assessment of its worth. This approach takes into account the industry realities, especially in the wake of a challenging funding landscape that has defined India’s startup ecosystem in 2023.
In a year where Indian startups faced a severe funding squeeze, Flipkart’s success in securing substantial fundraise assumes broader implications. The company’s ability to navigate the financial landscape showcases resilience and adaptability, making it a noteworthy entity within the Indian startup ecosystem. It also bodes well for Indian firms, many of whom have struggled in the recent funding winter. Indian startups raised a total of $7 billion this year, marking the lowest amount of fundraising in seven years.
