Walmart leads $1.2b round for India's Flipkart
Walmart has led a $1.2 billion funding round for Flipkart, the Indian e-commerce business in which it acquired a majority stake at a valuation of $24 billion in 2018.
The company said that the round also includes capital committed from other existing shareholders, without giving names. Flipkart co-founder Binny Bansal, Tencent Holdings, Tiger Global Management, Walmart CEO Doug McMillo, and Microsoft are all investors in the business. Several others exited in full when Walmart arrived. The latest transaction values the company at $24.9 billion.
It is unclear if Tiger Global, which sold a part of its stake to Walmart, has managed to fully realize the proceeds from its exit. The Authority for Advance Ruling - a local regulatory body that does not have legal authority but gives companies tax-related counsel - ruled that the PE firm could not avoid capital gains tax from the sale, which involves a Mauritius-domiciled fund. Tiger Global could yet appeal the decision.
Founded in 2007, Flipkart facilitates the sale of more than 815 million products across 80 categories with over 100 million customers registered on the app. In addition to the main Flipkart platform, it owns fashion portals Myntra and Jabong as well as payments business PhonePe. Flipkart said that the various platforms saw a 30% growth in transactions per customer and an increase of 45% in active monthly customers for the 2020 financial year. Meanwhile, PhonePe now facilitates more than 500 million transactions every month.
"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," said Flipkart CEO Kalyan Krishnamurthy, according to a statement.
The battle for supremacy in India's e-commerce space also includes Amazon and Softbank-backed Snapdeal. According to Bain & Company, more than 300 million Indians shop online by 2025, generating total gross merchandise value in excess of $100 billion. Meanwhile, the payments ecosystem is dominated by Paytm, which is also backed by SoftBank, and a number of other VC-backed apps, as well as Google-owned Google Pay.
This year, Jio Platforms, a subsidiary of oil-to-retail conglomerate Reliance Industries, also launched JioMart, a daily goods-themed e-commerce platform that seeks to establish a nationwide distributor network of Jio-branded convenience stores that will deliver essential goods to customers. The company plans to offer electronics and fashion goods in the future as well. Jio Platforms counts Google, Facebook, KKR, General Atlantic, L Catterton and TPG Capital among its investors.
Last week, Flipkart began to declare the manufacturing country of origin for products sold on the platform. Indian regulators are expected to make it a mandatory requirement for e-commerce platforms in the coming months as part of a broader push to reduce the country’s reliance on imported goods.
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