To fight Covid further and fully overcome the pandemic impact, Flipkart Group, which includes Flipkart, PhonePe, Myntra and eKart, has raised $1.2 billion investment led by its parent company Walmart along with a group of existing shareholders. The round has valued the company at $24.9 billion in post-money valuation, the company announced on Tuesday. The investment will be made in two tranches in the current financial year. The investment is likely to give more firepower to Amazon’s arch-rival as the two remain the leading players in the fast-growing e-commerce market in India even as Mukesh Ambani’s JioMart is likely to emerge as another formidable player following the massive fundraise for Jio Platforms by global investors and technology firms including Facebook.
“Kalyan and team have a clear vision and are relentlessly focused on giving Indians frictionless choice in how they shop and sell online. We’re excited to see what the future holds as they continue their journey to become India’s most trusted eCommerce marketplace” said Judith McKenna, President and CEO of Walmart International.
Walmart, which had bought a majority stake in Flipkart Group in 2018 for $16 billion to remain competitive amid Amazon’s rapid growth India, had got the first quarter (Feb-April 2020) results of its international business affected “negatively” due to the restricted services of Flipkart during the lockdown. “Limited operations of the company’s Flipkart business in India for a portion of the quarter negatively affected growth,” Walmart had said in its financial presentation in May.
Flipkart had resumed full operations in green and orange zones on May 4 and later expanded to red zones as well on May 18 following the Ministry of Home Affairs guidelines. The company apart from other e-commerce and online delivery firms had reported challenges in supply chain and delivery even as its delivery personnel strength declined significantly. Walmart had reportedly raised its stake in Flipkart from 77 per cent at the time of acquisition to 81.3 per cent towards the end of 2018.
“Since Walmart’s initial investment in Flipkart, we have greatly expanded our offer through technology, partnerships and new services. Today, we lead in electronics and fashion, and are rapidly accelerating share in other general merchandise categories and grocery,” said Flipkart CEO Kalyan Krishnamurthy.
Flipkart said it has crossed monthly customer visits of 1.5 billion along with a 45 per cent growth in monthly active customers and 30 per cent rise in transactions per customer for FY20. The company currently has 150 million products listed across over 80 categories on its marketplace. The announcement came ahead of soon-to-be-launched e-commerce policy that has been in the works for around two years. The policy intends to address the issues around fake products, norms around data storage and usage, treatment with sellers to provide level playing field to compete with brands, deep discounting, price distortions and more.