Flipkart in early talks to raise $1 billion ahead of IPO

Indian e-commerce giant Flipkart has hit the market to raise about $1 billion at up to $30 billion valuation in a pre-IPO financing round, two people familiar with the matter told TechCrunch.

The Bangalore-based startup, which sold majority stake to Walmart in 2018, began exploring funding opportunities with some investors earlier this year. In recent months, the company has also internally discussed pushing its IPO process to early next year. (Media reports last year had suggested Flipkart might file for an IPO in 2021.)

Several major investors of Flipkart declined to comment on fundraise talks early this month. One investor said it made sense that the e-commerce group was planning to raise some capital as the market currently has no shortage of it.

11 Indian startups have turned unicorn this year, more than half of them last month, as some high-profile investors including Tiger Global and Falcon Edge double down on the world’s second largest internet market.

Flipkart was last valued at about $24.9 billion last year when it raised $1.2 billion in a round led by Walmart.

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. “Their third quarter GMV continued to reflect strong demand post-COVID lockdowns, with significant growth in monthly active customers,” said Doug McMillon, CEO of Walmart, in Q3 earnings call. India was hit by a second wave of the coronavirus early this year, which has again prompted some states to enforce restrictions on servicing of non-essential items on e-commerce platforms.

The Bangalore-headquartered firm competes neck to neck with Amazon in India. The American e-commerce group 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. A new powerful player arrived in the market last year to further increase the competition.

JioMart, a joint venture between 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.

At stake is one of the world’s fastest-growing e-commerce markets that is poised to grow even further as more first-time internet users begin to shop online. India’s e-commerce market is estimated to reach more than 300 million shoppers by 2025, according to estimates by Bain & Company. These shoppers would have bought items worth more than $100 billion from online platforms, the firm projected.

In recent years, Flipkart and Amazon have made a number of bets to expand their reach in India. Both of them have rolled out support for Hindi language (Flipkart has added several additional Indian languages as well), and partnered with neighborhood stores.

This is a developing story. More to follow…



Read more here: https://techcrunch.com/2021/05/10/flipkart-in-early-talks-to-raise-1-billion-ahead-of-ipo/

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