Flipkart floats $60-100 mn fund to invest in early-stage startups

Homegrown e-commerce giant Flipkart, one of the storied companies built through venture capital funding till its acquisition by Walmart Inc. last year, said it has launched an internal fund to back early-stage startups.

The fund will invest in e-commerce, fintech, payments and complementary segments, Flipkart said in a statement, without disclosing the size of the vehicle.

“The aim is to seed innovation that is good for India and which promotes digital inclusion in a variety of spaces, by enabling startups to focus on bringing their ideas to life and scaling them,” said Emily McNeal, group chief financial officer at Flipkart.

A person familiar with the development told VCCircle on the condition of anonymity that the fund's size will be in the range of $60-100 million (Rs 410-690 crore). The person added that McNeal will head the fund.

Flipkart had earlier been investing in startups through its balance sheet. In fact, it had acquired mobile payments company PhonePe and online fashion retailer Myntra, which are now its prized units.

Flipkart's other acquisitions include mobile phone and electronic products repair and services startup F1 Info Solutions and artificial intelligence-based speech recognition startup Liv.ai.

Last year, it also acquired Upstream Commerce, an Israeli startup which uses predictive analytics to automatically fix retail prices of products.

Notably, Flipkart founders Binny Bansal and Sachin Bansal were quite active in investing in startups in their personal capacity and both continue to be so even after leaving the company.

Current Flipkart chief executive Kalyan Krishnamurthy has also invested in startups in his individual capacity. Last month, he backed online business-to-business (B2B) industrial goods marketplace Moglix.

Investment funds by corporate houses

A slew of Indian corporate professionals and business houses have floated investment vehicles in the past to back startups.

Ratan Tata had begun actively investing in startups after he quit as the chairman of Tata Sons in 2012. Tata’s RNT Associates has invested in several high-profile startups such as digital payments firm Paytm, eyewear e-tailer Lenskart, furniture e-tailer Urban Ladder, cab aggregator Ola and Chinese mobile handset manufacturer Xiaomi.

Other examples of such investment vehicles include Wipro founder Azim Premji’s family office PremjiInvest and Infosys co-founder NR Narayana Murthy's Catamaran Ventures.

Infosys itself has a $500-million startup fund called Infosys Innovation Fund.

Last year, the Investment Trust of India (ITI), a financial services group backed by Sun Pharmaceutical Industries Ltd director Sudhir Valia, also announced the launch of an early-stage venture capital fund.

Former Tata Sons Ltd chairman Cyrus Mistry also floated an investment firm called Mistry Ventures LLP to incubate new ventures and provide seed- and early-stage growth capital to startups in India and other countries last year.