Flipkart will secure around $1.2 billion in funding spearheaded by majority owner Walmart Inc, the Indian e-commerce group announced Tuesday, as it plans to go head-to-head with US retail behemoth Amazon.com Inc, in a pandemic-shaken market.
The investment, also supported by other current stakeholders, will make Flipkart worth around $24.9 billion and comes two years after U.S. retail group Walmart paid $16 billion for a stake in Flipkart worth over 70 percent.
Besides Amazon, Flipkart is facing pressure from local online grocery upstart JioMart, funded by Indian tycoon Mukesh Ambani, in a crucial e-commerce growth landscape.
The American retail conglomerate disclosed that the fresh funding would help Flipkart, which was worth around $20 billion two years ago, boost its e-commerce influence in India as the world's second-biggest internet market starts to bounce back from the coronavirus turmoil.
"We are very grateful for the solid backing of our stakeholders as we continue to build our platform and serve the growing needs of Indian customers during these challenging times," Manish Singh of TechCrunch quoted Flipkart chief executive Kalyan Krishnamurthy as saying.
Walmart's strong support is concurrent with the Ambani-led Jio Platforms accumulating $15 billion from several investment groups, including social media giant Facebook and private equity companies like KKR and Silver Lake.
Bloomberg reported Tuesday that search titan Google was in discussion to pour some $4 billion in Reliance Jio Platforms, giving the Indian group more ammunition to transform itself into a technology powerhouse. Recently, JioMart, its e-commerce platform under the Reliance Retail umbrella, rolled out across 200 cities in the country.
Founded in 2007, the Flipkart Group includes Flipkart, logistics service eKart, digital payments app PhonePe, and fashion specialty site Myntra. In 2018, Walmart Inc. allotted $16 billion for majority ownership in the group.
Flipkart recently breached the 1.5 billion-visit per month mark and posted a 45-percent growth in monthly active clients and 30-percent advance in transactions per customer for the current fiscal year.
Meanwhile, Ambani's Reliance Industries has been granted billions of dollars in the past weeks from prominent investors for its digital unit, which is seen to unveil an online service for Indian grocers and small businesses.
Pandemic-induced lockdowns have hampered business activities in India for much of April and May. The country is currently struggling with an increase in new coronavirus infections, making it the third worst-hit country behind Brazil and the U.S.
Walmart's joint venture with Flipkart comes on the heels of major growth of its own e-commerce operations in the US, with online revenues soaring 75 percent in the first quarter, sparked by rising demand due to the health crisis.
