Walmart-owned Indian eCommerce company Flipkart has brought back Japanese multinational conglomerate holding company SoftBank Group as an investor in a $3.6 billion funding round, after which the online retailer will be valued at $37.6 billion.
The fundraise comes amid Flipkart exploring going public in the US and aiming for a valuation of up to $50 billion. The new round of funding was led by 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, Tencent, Willoughby Capital, Antara Capital, Franklin Templeton and Tiger Global.
The investment marks the return of SoftBank as a shareholder of Flipkart. Japan’s SoftBank had sold roughly 20 percent of its stake in Flipkart to Walmart, which acquired a roughly 77 percent stake for about $16 billion in 2018. The latest funding values the company at nearly double that rate.
“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,” Ms. Lydia Jett, partner at SoftBank Investment Advisers, said.
The Bangalore-headquartered firm competes with the American eCommerce giant Amazon in India. Both the firms are struggling to aggressively expand their footprint in the country, where physical stores continue to drive the vast majority of retail sales. According to estimates by management consulting firm Bain & Company, India’s eCommerce market is estimated to reach more than 300 million shoppers by 2025.
“We will focus on accelerating growth for millions of small and medium Indian businesses, including kiranas,” Mr. Kalyan Krishnamurthy, Flipkart Group CEO said in a statement.