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Flipkart valuation peaks at $37 billion in new fundraise

Flipkart raises $3.6 billion at a post-money valuation of $37.6 billion in what is considered as the pre-IPO round for the Indian e-commerce conglomerate as it works to list in the public markets as soon as early next year.

Flipkart revealed today that it had raised $3.6 billion at a valuation of $37.6 billion. The investment came when the startup is gearing up for its listing in the public markets as soon as early next year.

The latest round is considered the largest for any Indian startup and was led by GIC, Canada Pension Plan Investment Board (CPP Investments), SoftBank Vision Fund 2 and Walmart. The round also featured sovereign funds DisruptAD, Qatar Investment Authority, Khazanah Nasional Berhad, Tencent, Willoughby Capital, Antara Capital, Franklin Templeton and Tiger Global.

The Monday investment marks the return of SoftBank as a shareholder of Flipkart. SoftBank had taken the exit from the startup when the Bangalore-based firm sold majority stakes to Walmart in 2018 at a valuation of $22 billion, TechCrunch reported.

“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.”  Judith McKenna, President and CEO of Walmart International.

Speaking on the latest development, Kalyan Krishnamurthy, Chief Executive Officer at Flipkart Group, said, "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."

Kalyan Krishnamurthy, Chief Executive Officer at Flipkart Group|Source:Business Standard

"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," he added.

Competition in India's online retail space is heating up with Flipkart and Amazon battling it out. The American e-commerce group has invested over $6.5 billion in the South Asian market. Also, e-commerce platform JioMart, a joint venture between Reliance Retail (India's largest retail chain) and Google and Facebook-backed Jio Platforms (India's largest telecom operator), launched last year in over 200 cities and towns across the nation.

One reason why competition is heating up in this sector is the projected growth of the e-commerce market. According to Bain & Company, India's e-commerce market is estimated to reach more than 300 million shoppers by 2025, according to estimates. The firm projected these shoppers would have bought items worth more than $100 billion from online platforms.

Flipkart claims that it has over 350 million registered users across its services in the country, fashion e-commerce Myntra inclusive.

The company, in a statement, said, "Flipkart's logistics and supply chain arm, Ekart, employs more than 100,000 people and makes deliveries to more than 90% of the addressable pin-codes in India, which, coupled with strategic warehouse infrastructure investments, is one of the group's core strengths. Venturing into the social commerce space, Flipkart recently announced the launch of Shopsy, which will encourage local entrepreneurship."

India in focus

GDP: $2.262 trillion compared to $2.871 trillion in 2019

Population: 1.38 billion in 2020 compared to 1.366 billion in 2019

GDP per capita: $1,900 in 2020 compared to $2,100 in 2019