Walmart-backed Flipkart is gearing up for a fresh round of funding, with the US retail giant pledging a substantial $600 Mn injection into the Indian ecommerce platform. The funding round, anticipated to reach $1 Bn, could potentially value Flipkart at a 5-10% premium to its previous valuation of $33 Bn, as reported by ET, citing reliable sources.
In a regulatory filing, Walmart confirmed its commitment to invest $600 Mn in Flipkart, underlining the ongoing partnership between the two retail giants. The additional funding is expected to not only strengthen Flipkart’s financial position but also attract new investors alongside existing stakeholders.
Walmart’s association with Flipkart dates back to 2018 when it acquired a 77% stake in the ecommerce major for a substantial $16 Bn, valuing the company at $22 Bn. Post the separation of PhonePe from the Flipkart group, the ecommerce platform’s valuation surged to $33 Bn.
During the first half of 2023, Walmart strategically spent $3.5 Bn to acquire Flipkart shares from non-controlling stakeholders, including influential entities like Tiger Global and Accel. Flipkart, in turn, has played a pivotal role in contributing to Walmart’s quarterly earnings, a fact highlighted in Walmart’s recent Q3 2023 earnings statement.
Despite its significance to Walmart’s performance, Flipkart faced challenges due to the delayed festive season, impacting the timing of the Flipkart Big Billion Days sales. Walmart acknowledged this in its earnings statement, stating that the timing shift is expected to benefit the growth rate in Q4.
As the ecommerce landscape evolves, Flipkart continues to navigate losses. Flipkart India, the B2B arm, reported a widened net loss of over 42% YoY to INR 4,845.7 Cr in FY23. However, its operating revenue displayed resilience, recording a 9.7% increase to INR 55,923.9 Cr. The ecommerce giant’s marketplace arm, Flipkart Internet, also reported widened losses in FY22.
