Walmart's Indian e-commerce subsidiary Flipkart has snagged $3.6 billion in a funding round led by investors that include Singapore's GIC and Japan's SoftBank. It says the funds will be tapped to further drive its goal to "transform" India's commerce industry, including traditional segments such as fashion and local mom-and-pop grocery stores, called kiranas.
The latest investment pushes Flipkart's post-money valuation to $37.6 billion, the company said in a statement Monday. Lead investors for the latest funding round comprised GIC, Canada Pension Plan Investment Board, SoftBank Vision Fund 2, and Walmart, which acquired a 77% stake in Flipkart in 2018 for $16 billion. Walmart later in 2020 led a $1.2 billion equity round to bump up its majority stake to 82%.
The e-commerce operator's CEO Kalyan Krishnamurthy said the funds injection "reflects the promise of digital commerce" in the country. He added that Flipkart would focus on driving growth for local small and midsize businesses (SMBs) and invest in new categories, tapping locally developed technology to enhance customer experience and its supply chain.
Like most online commerce platforms worldwide, Flipkart said India's digital commerce had accelerated over the past year amidst the global pandemic, fuelled by demand for safer access to products. It added that it would continue to invest in its "people, technology, supply, and infrastructure" to meet the requirements of India's growing consumer base.
A key focus here was helping traditional segments tap technology, specifically, the fashion industry as well as kiranas, where Flipkart would look to expand its last-mile delivery programmes to support these grocery stores' digitalisation efforts. It works with 1.6 million kiranas through its wholesale business and last-mile delivery programmes.
"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 SoftBank Investment Advisers' partner Lydia Jett.
Operational since 2007, Flipkart has more than 350 million registered users across India, where its logistics arm Ekart covers deliveries to more than 90% of the country's addressable pin codes. Its online marketplace has a network of more than 300,000 registered sellers, of which 60% are from tier-2 cities and further. Its platform offers more than 150 million products across 80 categories.
Flipkart also is a majority shareholder in local payments app, PhonePe, which has more than 300 million users and processes one billion transactions each month. Some 80% of these are transacted in tier-2 and tier-3 cities.