According to sources, the Indian eCommerce giant Flipkart has hit the market to raise about $1 billion at up to $30 billion valuation in a pre-IPO financing round.
The startup, which sold majority stake to US-based Walmart in 2018, began exploring funding opportunities with some investors earlier this year. In recent months, the company has also internally discussed pushing its public listing to early next year, the sources said.
One of the Flipkart investors said it made sense that the eCommerce group was planning to raise some capital as the market currently has no shortage of it. 11 Indian startups have turned into unicorns this year, more than half of them last month, as some high-profile investors including Tiger Global and Falcon Edge doubled down on the world’s second largest internet market.
Flipkart, which was last valued at about $24.9 billion last year when it raised $1.2 billion in a round led by Walmart, hasn’t finalized the new investment and the deal size as well as the valuation may change, one of the sources said.
In an earnings call in November last year, Walmart said Flipkart and its payments entity PhonePe had seen the number of monthly active customers reach an all time high. But India was hit by a second wave of the coronavirus in early April, which has again prompted some states to enforce restrictions on servicing of non-essential items on eCommerce platforms.
Rivalry with Amazon, JioMart
The company competes neck to neck with American eCommerce company Amazon, which has invested over $6.5 billion in the South Asian market. Both the firms are struggling to aggressively expand their footprint in India, where physical stores continue to drive the vast majority of retail sales. Amidst this, a new powerful player arrived in the market last year to further increase the competition.
JioMart, a joint venture between Mukesh Ambani’s 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.
They are competing for one of the world’s fastest-growing eCommerce markets that is poised to grow even further as more first-time internet users begin to shop online. India’s eCommerce market is estimated to reach more than 300 million shoppers by 2025.
In recent years, Flipkart and Amazon have taken a number of steps to expand their reach in India. Both of them have rolled out support for Hindi language, while Flipkart has added several additional Indian languages as well, and partnered with neighborhood stores.
Thank you very much for choosing GCC Business News to be an important part of your professional life. You will receive a confirmation e-mail. Please check SPAM or UPDATES folder
