Flipkart, a prominent e-commerce platform supported by Walmart, is reportedly in the process of raising a new funding round of $1 billion, with a substantial commitment of $600 million from the US retail giant.
According to sources cited by ET, the anticipated new funding is expected to value Flipkart at a premium of approximately 5-10% over its last valuation of $33 billion.
The report indicates that in addition to Walmart and current stakeholders, new investors are set to participate in the funding round of the Bengaluru-based e-commerce major.
While Flipkart confirmed Walmart’s investment of $600 million in the company, it emphasized that the remaining details are speculative. Walmart also officially disclosed its new investment in a regulatory filing.
In 2018, Walmart acquired a 77% stake in Flipkart for $16 billion, establishing the company’s valuation at $22 billion. Following the separation of PhonePe from the group last year, Flipkart’s valuation reached $33 billion.
During the six months concluding on July 31, 2023, Walmart invested $3.5 billion to acquire shares of Flipkart from non-controlling stakeholders, including Tiger Global and Accel.
Flipkart significantly contributes to the quarterly earnings performance of the US-based ecommerce giant. According to Walmart’s Q3 2023 earnings statement, its operations in India were affected by the delayed arrival of the festive season and the shift of Flipkart Big Billion Days sales from Q3 last year to Q4 this year.
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“The timing of Flipkart’s Big Billion Days pressured International sales growth, as the event moved from Q3 last year to Q4 last year. So we expect the timing to be a benefit to Q4’s growth rate for the segment,” Walmart had said.
Meanwhile, Flipkart continues to experience financial losses. In FY23, Flipkart India, the B2B arm of the company, witnessed a standalone net loss widening by over 42% year-on-year, reaching INR 4,845.7 crore. Despite this, its operating revenue saw a 9.7% increase, reaching INR 55,923.9 crore.
In the fiscal year 2022, Flipkart Internet, the marketplace division of the e-commerce giant, also recorded an increase in losses.
