Transaction:
- The Flipkart Group, India’s homegrown consumer internet ecosystem, announced that it has raised US $3.6 billion in funding. The investment values the Group at US $37.6 billion post-money.
Flipkart Group:
- The Flipkart Group is a digital commerce entity and includes group companies Flipkart, Myntra, Flipkart Wholesale and Cleartrip and majority shareholding in PhonePe.
- U.S. retail giant Walmart acquired majority (77%) stake in Flipkart for $16 Billion in 2018.
- Started in 2007, Flipkart has a registered customer base of more than 350 million, offering over 150 million products across 80+ categories.
Investors:
- This round of funding was led by financial investors 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, and marquee investors Tencent, Willoughby Capital, Antara Capital, Franklin Templeton and Tiger Global.
- Softbank group made a reinvestment in flipkart in this round as it had earlier exited the company in 2018 after selling it’s 20% stake to wallmart.
Rationale:
- Kalyan Krishnamurthy, CEO of Flipkart commented that Flipkart is committed to transforming the consumer internet ecosystem in India. He also added that company will continue to make investments across people. Tech, supply chain and infrastructure to address requirement of rapidly growing consumer base in India.
- Flipkart will definitely be looking to develop a world class supply chain system to attain cost leadership in Indian market which is a core competency of Wallmart.
- This funding gives Flipkart fire power to fight large and deep pocketed competitors of Indian Retail market namely Reliance, Tata and Amazon.
- Reliance is competing in the Retail space with Jiomart and has acquired number of startups like Netmeds and Urban ladder and has raised significant equity in Jio platform. Tata has acquired Big basket and 1mg recently while Amazon has done significant investment in Indian retail space.
- Along with fashion and consumer goods, Grocery will also be a focus area of competition where Big basket (Tata) is currently leading followed by Amazon, Flipkart, Reliance and Zomato planning to make a re-entry.
- It is said that Walmart is planning an US IPO for Flipkart in the near future.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
Disclaimer:
This material has been prepared by the personnel in Vora Corporate Finance which is Investment Banking arm of Vora Management Consultancy Private Limited and looks after Mergers & Acquisitions (M&A), Private Equity (PE), Fund Raising, Debt syndication and Valuations and is based out of Ahmedabad, Gujarat, India. Any views or opinions expressed herein are solely that of individual authors and may differ from view of Vora Management Consultancy Private Limited. This material is proprietary to Vora Management Consultancy Private Limited and is for your personal use only. Any distribution, copy, reprints or forward to others is strictly prohibited.
This material captures the information based on information available in the public domain, public announcements and sources believed to be reliable. Analysis contained herein is based on publicly available information and appropriate assumptions. This material is intended merely to highlight market developments and is not intended to be comprehensive and does not constitute strategic, investment, legal or tax advice. In no event Vora Management Consultancy Private Limited be liable for any use by any party or for any decision made or action taken by any party in reliance upon, or for any inaccuracies or errors in, or omissions from, the information contained herein and such information may not be relied upon by you for evaluating any transaction.
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