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Walmart-Owned Flipkart Raises $3.6B to Fund Next Stage of Growth in India

Flipkart Funding
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The Flipkart Group — India’s homegrown digital commerce conglomerate that is majority-owned by Walmart — has raised U.S. $3.6 billion in fresh funding and is now valued at $37.6 billion.

The Flipkart Group includes ecommerce marketplace Flipkart, digital fashion destination Myantra, Flipkart Wholesale, online travel company Cleartrip and a majority stake in the payments app PhonePe. In 2018, Walmart beat out Amazon for a majority interest in the company, spending $16 billion for a 77% stake.

The new funding is a major vote of confidence in the potential of digital commerce in India, still a relatively nascent market. Brick-and-mortar dominates the retail scene, with ecommerce projected to account for just 7% of sales this year, up from 3% in 2017. Flipkart currently has more than 350 million registered users across India, a sizeable portion of the country’s nearly 1.4 billion population, but still with plenty of room for growth. More than 300,000 sellers from across the country are on Flipkart’s marketplace and 60% are from Tier 2 cities and beyond.

Flipkart plans to use the new funding to make investments across people, technology, supply chain and infrastructure to address the requirements of the rapidly growing consumer base in India. A key focus area for the group is to help informal commerce segments leverage the power of technology. Through its expanding grocery and last-mile delivery programs, the Flipkart Group will also work with kiranas (small local shops) to help them digitize and grow. Flipkart currently works with more than 1.6 million kiranas in India through its wholesale business and last-mile delivery program.

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Over the last few years, Flipkart has been investing in key categories including fashion, travel, grocery and strategic warehouse infrastructure. One of the group’s core strengths is its logistics and supply chain arm Ekart, which employs more than 100,000 people and makes deliveries to more than 90% of the addressable pin-codes in India. Myntra, which the group acquired in 2014, is among the leaders in the fashion category in India. The group also entered the social commerce space earlier this year with the launch of Shopsy in July — a platform designed to encourage local entrepreneurship by enabling individuals and small businesses to resell goods through social channels such as WhatsApp.

The latest round of funding was led by financial investors GIC, Canada Pension Plan Investment Board (CPP Investments), SoftBank Vision Fund 2 and Walmart, along with investments from sovereign funds DisruptAD, Qatar Investment Authority, Khazanah Nasional Berhad, and marquee investors Tencent, Willoughby Capital, Antara Capital, Franklin Templeton and Tiger Global. In sharing the reasons for their investment, executives pointed to the vast potential of the Indian market supported by “positive demographics, a growing middle class and deepening internet penetration.”

“At Flipkart, we are committed to transforming the consumer internet ecosystem in India and providing consumers access and value,” said Kalyan Krishnamurthy, CEO of Flipkart Group in a statement. “This investment by leading global investors reflects the promise of digital commerce in India and their belief in Flipkart’s capabilities to maximize this potential for all stakeholders. As we serve our consumers, we will focus on accelerating growth for millions of small and medium Indian businesses, including kiranas. We will continue to invest in new categories and leverage made-in-India technology to transform consumer experiences and develop a world-class supply chain.”

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