Walmart leads a $1.2 billion investment round in Flipkart

Walmart is the lead company on another $1.2 billion investment into Flipkart, according to a report from Tech Crunch. Walmart acquired a 77% majority interest in Flipkart in August 2018 for $16 billion, joining minority partners Tencent, Tiger Global, Microsoft and company co-founder Binny Bansal.

This new round of financing also involved some of the minority partners, though Flipkart did not clarify who.

Flipkart has 150 million products listed in more than 80 categories on its marketplace. This investment 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 issues around fake products, norms around data storage and usage, treatment with sellers to provide level playing field to compete with brands, deep discounting, and price distortions.

Walmart International CEO Judith McKenna has said the Flipkart investment continues to pay off in multiple ways through its diversified portfolio of companies. Walmart is said to value Flipkart at $24.9 billion following this recent round of financing. The new round of capital is expected to help Flipkart further grow its e-commerce marketplace in India as the populous country continues to recover from the COVID-19 crisis. Flipkart CEO Kalyan Krishnamurthy told the media the company is grateful for the backing of its shareholders as Flipkart continues to build its platform and serve the growing needs of Indian consumers during challenging times.

“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, all while providing increasingly seamless payment and delivery options for our customers. We will continue innovating to bring the next 200 million Indian shoppers online,” he said.

Flipkart reports its active monthly customers jumped 45% in the fiscal year ended March. Flipkart, in business for 13 years, recently surpassed 1.5 billion visits per month. India’s e-commerce market is estimated to reach more than 300 million shoppers by 2025, according to estimates by Bain & Company. The shoppers will buy items worth more than $100 billion from online platforms, the firm projected.

That said, COVID-19-induced lockdowns restricted business activities in India for much of April and May. India is now grappling with a surge in infections, making it the third worst-hit nation behind Brazil and the United States. Walmart reported in May that Flipkart had “a significant sales decline in April.”

Walmart CEO Doug McMillon said last year the Flipkart gamble was one the retail giant had to make given India’s e-commerce market is expected to grow from $27 billion to $73 billion by 2022.

“In the case of India, it’s worth it. If it had been a smaller market, we may have passed. But this is a unique opportunity. And when you look out 5, 10, 20 years from now, time will tell,” McMillon said.

McKenna said Flipkart’s ecosystem of portfolio businesses helps reach what she has described as one of the diverse and dynamic markets in the world.

“We’re excited to see what the future holds as they continue their journey to become India’s most trusted eCommerce marketplace.” she said.