Ecommerce Startup Flipkart Could Raise $1 Billion — Report

By Adriaan Brits Tuesday, May 11, 2021

Flipkart is in talks to raise around $1 billion ahead of the planned initial public offering (IPO) after the ecommerce startup company started fundraising discussions with some of its business investors earlier in 2021. The startup company sold its majority stake to Walmart for $16 billion in 2018.

Stack of wooden blocks with shopping carts on them.

Capitalizing on Rapid Growth and High Valuation

Indian ecommerce business giant has also held talks inside the startup company about moving its IPO timeline to early 2022, the report adds. Some early Flipkart business investors believe raising capital is a logical move for the startup company as the market has plenty of capital at the moment.

A new business investment hasn’t been finalized, meaning the deal size and the company’s business valuation could vary. Flipkart hit a business valuation of $24.9 billion in 2020 after it raised $1.2 billion in a funding round led by Walmart.

As many as 11 India-based startup businesses entered the unicorn territory in 2021 as a group of top investors, including Tiger Global and Falcon Edge, focused on the world’s second-largest internet market.

The number of active customers on a monthly basis hit an all-time high in Flipkart and its payments business PhonePe in November 2020. This year, the ecommerce company’s gross merchandise value (GMV) growth was heavily affected by the 53-day nationwide lockdown in India, said Judith McKenna, president and CEO of Walmart International.

“But the business rebounded and exited Q4 with strong momentum, delivering GMV growth roughly double that of the full year,” McKenna said, noting that over 250 million customers used the company’s platform amid festival sales in 2020.

India took a blow by the second wave of COVID-19 in April, forcing certain states to impose restrictions on offering non-essential items on ecommerce platforms. On Tuesday, Flipkart said it would focus on reinforcing its grocery infrastructure as it brings more offerings.

Amazon, Flipkart’s biggest ecommerce rival in India, invested more than $6.5 billion in the South Asian market. Ecommerce companies are striving to expand their market share in India, where most of the retail business sales come from physical stores.

But the competition increased even more in India last year, after the ecommerce platform JioMart, a joint venture (JV) between Reliance Retail and Jio Platforms, entered the market and launched in more than 200 cities and towns across the country.

The ecommerce market in India is expected to acquire more than 300 million shoppers by 2025, according to the US management consultancy firm Bain & Company. This could be good news for Flipkart since over a third of the entire population in India are millennials.

“By 2030, there is an estimate that this young population of millennials and GenZ will be 75% of the total population. 700 million Indians are digital today. And I also want to just quickly acknowledge that Digital India vision of the Government of India, which has actually enabled this. So you have a unique combination of a big market, completely digital, getting wealthier, and very young,” said Kalyan Krishnamurthy, CEO of Flipkart, in February.

Summary

Indian ecommerce startup Flipkart is in talks to raise $1 billion after hitting a business valuation of $24.9 billion in 2020.

About the Author


Headshot for author Adriaan Brits
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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