Walmart’s Indian arm raises US$3.6 billion in mega funding round

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 Walmart’s Indian arm raises US$3.6 billion in mega funding round
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Summary

  • Walmart’s India arm raises US$3.6 billion in fresh funding round.
  • The funding pegs the valuation of e-tailer at US$37.6 billion.
  • Another major highlight of the funding round is the re-investment of Japan’s Softbank into the company.

Flipkart, the Indian subsidiary of American multinational retail corporation Walmart Inc (NYSE:WMT), has said that it has raised US$3.6 billion in the latest round of funding.

This funding round was led by many financial investors like Singapore’s 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.

“The quality of the investor group and valuation announced today is further confirmation of global confidence in Flipkart and its mission to transform commerce in India,” Judith McKenna, President and CEO – Walmart International said.

The funding round also marks the re-entry of Japanese Softbank Group into the company, which had divested its stake in the e-tailer when it was acquired by Walmart in 2018 for US$16 billion.

“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,” Lydia Jett, Partner, SoftBank Investment Advisers, said.

The latest funding round pegs the Walmart’s India arm at a whopping valuation of US$37.6 billion, after the infusion of money.

JP Morgan Securities (Asia Pacific) Limited and Goldman Sachs & Co LLC served as placement agents to Flipkart for this fund raise, while Hogan Lovells and Shardul Amarchand Mangaldas & Co served as legal counsel to the deal.

The company will leverage the funds to make “deeper investments” across people, technology, supply chain and infrastructure. The company’s immediate focus is on helping informal commerce segments leverage the power of technology.

Walmart’s Indian arm has more than 300,000 registered sellers from across the country on its marketplace, and almost three-fifths are from tier-2 cities and beyond. The company also works with more than 1.6 million neighbourhood grocery stores, called kiraana shops, in the local dialect.

In India, the company is seen as a competitor to Amazon Inc (NASDAQ:AMZN) and Reliance Industries Limited’s retail arm – a company promoted by Asia’s richest man Mukesh Ambani.

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