FLIPKART, AN E-COMMERCE GIANT RAISES $3.6 BN VALUING IT AT $37.6 BILLION.

Founded by a team of 2, Sachin Bansal & Binny Bansal in 2007, Flipkart, an e-commerce company registered in Singapore has raised $3.6 billion in its latest funding round which saw participation from marquee investors such as Walmart, Canada Pension Plan Investment Board(CPP Investments), the Singapore government’s sovereign wealth fund GIC, Softbank Vision Fund 2 (who had exited the firm & sold their stake to Walmart during the acquisition), DisruptAD, the Qatar Investment Authority, and Khazanah Nasional Berhad as lead investors.

Participation was seen from other investors such as Tencent, Willoughby Capital, Antara Capital, Franklin Templeton, and Tiger Global. Speaking on the investment, Lydia Jett, Partner, SoftBank Investment Advisers, said, “SoftBank’s re-investment in Flipkart is driven by our experience with and conviction in the company’s management team to continue addressing the needs of the Indian consumer in the decades to come. The opportunity to meet consumer demand for high-quality selection at low prices and a young population make online consumption critical to India’s quest for the ‘$5 trillion economy’ that Flipkart’s growth story has been enabling.” Having been acquired by US retail giant Walmart for $16 billion in 2018, assigning them a 77% stake in Flipkart. With this funding, the e-tailer is valued at $37.6 billion, which is a 51% jump from its $24.9 billion valuation, after an internal round of $1.2 billion led by Walmart in July 2020. 

Holding a majority stake in the e-tailer, Walmart has helped Flipkart carve a niche in the global marketplace as well as penetrate smaller towns & cities, while also helping in the expansion of their product range to 30 million products across multiple categories. Although the co-founders have exited the company, Binny Bansal still holds a 3.5% stake in the company. With plans to get listed in the US Securities & Exchange Commission (SEC), the Bangalore-based company is aiming for a $50 billion valuation. After the latest investment, the company has entered the league of the top 10 largest e-commerce companies by valuation.

Kalyan Krishnamurthy, chief executive officer (CEO), Flipkart Group, said, “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” The latest round of funds will be employed towards the expansion of operations, enhancing supply chain & logistics, technology, and infrastructure for last-mile deliveries, while also amplifying their focus on grocery, fashion, and consumer goods. Further, Agus Tandiono, managing director, head of fundamental equities Asia, CPP Investments, said, “The organization believed India would be a leading source of global growth in the decades ahead, supported by positive demographics, a growing middle class, and deepening Internet penetration.” Starting with 2 people, the company has grown to employ 30,000 people with over 46 million registered users, and 10 million daily active users. According to a report, with a trend that has lately been in prime focus, Flipkart has announced a buyback of the Employee Stock Options worth Rs 600 crore, where the employees will be eligible to liquidate 10% of their vested shares, and over 6000 employees are said to benefit from this move. This has been in line with the recent buybacks by companies such as Cred, Swiggy, Meesho, BrowserStack, Paytm, Razorpay, Udaan, Zerodha, and ShareChat among others. In a time where the lives of employees have been disrupted due to COVID, this has been a big move towards helping & lauding the employees for their relentless efforts at strengthening their company’s market position. 

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