India-based e-Commerce Retailer Flipkart Going Public, Closes $3.6 Billion Funding Round
India-based e-commerce retailer Flipkart may go public soon, and has just closed a $3.6 billion funding round.
July 13 2021, Published 10:16 a.m. ET
Flipkart, an India-based e-commerce company, has raised additional capital in a new investment from former stakeholder SoftBank. Although the company doesn’t have an official IPO date yet, sources have said it may go public as soon as the fourth quarter of 2021 or sometime in 2022.
Along its path to an IPO, Flipkart continues to raise capital to expand its operations and invest in programs such as grocery delivery. It has just raised $3.6 billion from investors, including Tencent, Singaporean sovereign wealth fund GIC, and Qatar Investment Authority.
“As we serve our consumers, we will focus on accelerating growth for millions of small and medium Indian businesses,” CEO Kalyan Krishnamurthy said in a statement about the newest funding round.
Who owns Flipkart?
Walmart is the majority owner of Flipkart after buying a 77 percent stake in the company in 2018 for about $16 billion. The holding could help Walmart compete with Amazon.com in India.
In Apr. 2021, Bloomberg News reported on Flipkart’s potential IPO. People familiar with the matter reportedly said that JPMorgan Chase and Goldman Sachs would likely be the deal's leading bookrunners.
Flipkart's latest funding round
In its most recent funding round, Walmart engineered the return of SoftBank Group as an investor in Flipkart. SoftBank was a 20 percent shareholder in the company in 2018 when it sold its stake to Walmart.
According to Reuters, SoftBank Investment Advisers partner Lydia Jett said “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.”
The $3.6 billion injection brings Flipkart's valuation to approximately $37.6 billion. The company may seek a valuation of as much as $50 billion in its eventual IPO, which could happen in the fourth quarter of 2021 or sometime in 2022.
Other investors in this funding round included the Canada Pension Plan Investment Board, with about $800 million, and Walmart and SoftBank Vision Fund 2.
Flipkart's valuation
Flipkart has about 350 million registered users, Reuters reports. It began primarily as an online book retailer and eventually expanded into many other product offerings, much like Jeff Bezos's Amazon.
Online shopping is growing rapidly in India, reports CNBC. In the last three months of 2020, e-commerce volumes and value grew 36 and 30 percent year-over-year, respectively. Flipkart is leading among Indian technology startups at the moment. Its top competitors include Paytm, Byju’s, Oyo, Ola, Zomato, and Swiggy.
When will Flipkart go public with an IPO?
Bloomberg reported in Apr. 2021 that Flipkart was considering an IPO as early as the final quarter of 2021. It had been thinking about going public through a SPAC merger, but now seems to be leaning toward a traditional offering. Just this week, Bloomberg has adjusted its timeline for Flipkart’s IPO to sometime in 2022.
