Walmart's Flipkart raises fresh funds for US$38 billion valuation as IPO looms
Walmart Inc-owned Indian online retailer Flipkart said on Monday it has raised US$3.6 billion in funding.
BENGALURU: Walmart Inc-owned Flipkart will double its valuation in less than three years to US$37.6 billion after the latest funding that included SoftBank Group Corp, as the Indian online retailer gears up to go public later this year.
The U.S. retail giant bought a 77per cent stake in Flipkart for US$16 billion in 2018 and since then has expanded to small towns and cities, added more items such as furniture and grocery to its online store and increased its warehouses in its race with Amazon.com's India unit.
The Bengaluru-based company is aiming for a US$50 billion valuation for its public listing and was in talks in the United States for a deal with a blank-check firm, people familiar with the matter told Reuters in March.
Its fresh funding round was led by investors GIC, Canada Pension Plan Investment Board, SoftBank Vision Fund 2 and Walmart and marks the return of SoftBank, which had sold its roughly 20per cent stake to Walmart during the 2018 deal.
"SoftBank's re-investment in Flipkart is driven by our experience with and conviction in the company's management team to continue addressing the needs of the Indian consumer in the decades to come," Lydia Jett, partner at SoftBank Investment Advisers, said.
Like its rival Amazon, Flipkart began by selling books, but diversified rapidly into sell selling smartphones, clothing and other items.
"We will focus on accelerating growth for millions of small and medium Indian businesses, including kiranas," Kalyan Krishnamurthy, Flipkart chief executive, said in a statement.
The new capital will be used to expand operations and invest further in the company's grocery, fashion and last-mile delivery programs, Flipkart said.
India's rapid smartphone adoption and cheap mobile data have propelled growth for digital startups that sell everything from groceries and cosmetics to smartphones and holidays.
Several prominent Indian startups too have spelt out plans to go public to cash in on liquidity by foreign funds. Some closely watched include food delivery startup Zomato, payments services PayTM, beauty brand Nykaa and ride-hailing service Ola.
Twenty-two companies have debuted this year as of July 9. There were US$3.6 billion worth of IPOs in India in the first half of 2021, up from US$1.1 billion at the same time last year, according to Refinitiv.
The level so far this year is the highest since 2008.
(Reporting by Vishwadha Chander in Bengaluru; Editing by Arun Koyyur)