Flipkart Raises $3.6 Bn Funding
With this development, Flipkart will continue to make deeper investments across people, technology, supply chain and infrastructure to address the requirements of a rapidly growing consumer base in India
Bengaluru-based Flipkart Group, a homegrown consumer Internet ecosystem, on Monday announced that it has raised $3.6 billion in funding as it continues to grow and advance the digital commerce ecosystem in India. The fundraise demonstrated significant interest from global investors, including sovereign funds, private equity, and crossovers in addition to Walmart. This 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.
The investment values the Group at $37.6 billion post-money.
"At Flipkart, we are committed to transforming the consumer internet ecosystem in India and providing consumers access and value. 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," said Kalyan Krishnamurthy, chief executive officer, Flipkart Group.
With this development, Flipkart will continue to make deeper investments across people, technology, supply chain and infrastructure to address the requirements of a rapidly growing consumer base in India. A key focus area for the Group is to help informal commerce segments leverage the power of technology. As one of the leaders in the fashion segment, this means working with the fashion industry and helping small businesses explore untapped opportunities that technology presents. Through its expanding grocery and last-mile delivery programs, the Group will also work with kiranas to help them digitize and grow, the platform shared.
"One of the key investment themes for CPP Investments has been Asia's domestic consumption. We believe India will be a leading source of global growth in the decades ahead, supported by positive demographics, a growing middle class and deepening Internet penetration," shared Agus Tandiono, managing director, head of fundamental equities Asia, CPP Investments. "This investment in Flipkart builds on our program to provide long-term capital to industry leaders. We look forward to supporting Flipkart's efforts in growing India's e-commerce market."
More than 300,000 registered sellers from across the country are on Flipkart's marketplace, and 60 per cent are from tier-II cities and beyond. Flipkart also works with more than 1.6 million kiranas in India through its wholesale business and its last-mile delivery program, thereby contributing to the incomes of these kiranas and encouraging employment creation in the ecosystem. In addition, Samarth, Flipkart's program to support small businesses, underserved communities and artisans, has more than 750,000 beneficiaries.
"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," noted Lydia Jett, Partner, SoftBank Investment Advisers. "From our platform as one of the largest Asian e-commerce investors, SoftBank has a broad lens on the fundamental trends shaping digital commerce in the region. 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," Jett added.
The Group is also a majority shareholder in PhonePe, with more than 300 million users, facilitating over 1 billion transactions per month, 80 per cent of which occur in tier-II and tier-III cities and beyond.
"Flipkart is a great business whose growth and potential mirrors that of India as a whole — that's why we invested in 2018 and why we continue to invest today," stated Judith McKenna, president, and chief executive officer, Walmart International. "Kalyan and the team have put the Indian customer at the center of everything and they have continued to innovate in the categories and services Indian customers want most, creating new jobs and growth opportunities for Indian entrepreneurs and small businesses alongside them. The quality of the investor group and valuation announced today is further confirmation of global confidence in Flipkart and its mission to transform commerce in India."
"We are optimistic about the growth prospects of e-commerce and digitalization in India and believe Flipkart is well-positioned to benefit from this growth," added Sukumar Rajah, director of portfolio management, Franklin Templeton Emerging Markets Equity.
J.P. Morgan Securities (Asia Pacific) Limited and Goldman Sachs & Co. LLC served as placement agents to Flipkart in connection with this transaction, Hogan Lovells and Shardul Amarchand Mangaldas & Co served as legal counsel.