Walmart leads $1.2 bn fresh infusion in Flipkart at $24.9 bn valuation

Ecommerce major Flipkart Group has raised an additional $1.2 billion in an equity funding round led by its majority owner Walmart, along with a group of existing shareholders.

The deal values the Bengaluru-based company at $24.9 billion post-money, a statement said. The fund infusion will take place in two tranches over the remainder of the fiscal year.

Flipkart did not disclose the names of the existing investors participating in this round.

The company said the fresh funds will be used to support the continued development of its ecommerce marketplace.

"We're grateful for the strong backing of our shareholders as we continue to build our platform and serve the growing needs of Indian consumers during these challenging times," Flipkart CEO Kalyan Krishnamurthy said.

Walmart, the world’s largest brick-and-mortar retailer, had acquired a 77% stake in Flipkart for $16 billion in May 2018. The deal valued Flipkart at $20.8 billion.

Founded in 2007 by Sachin Bansal and Binny Bansal, the Flipkart Group includes digital payments platform PhonePe, fashion site Myntra and logistics and delivery service eKart besides its flagship ecommerce marketplace Flipkart.

"Flipkart continues to leverage its culture of innovation to accelerate growth and enable millions of customers, sellers, merchants and small businesses to prosper and be a part of India's digital transformation," said Judith McKenna, president and CEO of Walmart International.

Sachin exited Flipkart at the time of sale after selling his stake. He held about 5.10% stake in the company he founded and pocketed about $1 billion after the sale. Binny resigned from the company in November 2018, following an independent probe into allegations of ‘serious personal misconduct’. He had denied the allegations.

Flipkart claims it recently surpassed 1.5 billion visits per month and reported 45% growth in monthly active customers and 30% growth in transactions per customer for FY20.

Flipkart currently offers 150 million products across more than 80 categories. PhonePe recently reported annualized total payments value (TPV) of $180 billion on more than 500 million monthly transactions, the company claimed.

Flipkart Internet, the entity that operates Flipkart’s retail marketplace, widened its losses by 40% on higher employee benefits spends for the financial year 2018-2019 against Rs 1149.4 crore in the previous year. 

Flipkart Internet generates revenues primarily from services such as collection, marketplace, storage and logistics. 

Marketplace services accounted for 47% of the company’s turnover in FY19. These are revenues that are mainly derived from transaction fees paid by registered vendors on the online platform. 

Flipkart India, the business to business arm of the Singapore-registered holding parent company, widened its losses by 86% at Rs 3835.3 crore in FY19. Revenues grew 43 % to Rs 30931 crore.

Apart from Flipkart Internet and Flipkart India, the company has at least six other registered businesses in India. They include the likes of Flipkart India, Flipkart Online Services, Flipkart Digital Media, Flipkart Advanz, and Flipkart Logistics.

In October last year, it registered a new subsidiary called Flipkart FarmerMart, in a move to foray into the grocery segment.