US retailer Walmart will inject $1.2 billion (about Rs 9,045 crore) fresh investment in its Indian e-commerce business Flipkart, reports stated on Tuesday, as the firm aims to give it extra firepower to compete with Amazon and Mukesh Ambani’s JioMart in a coronavirus-hit market.
With this fresh round of investments the Indian e-commerce giant will be valued at $24.9 billion, the two companies said in a statement. Walmart had acquired a majority stake (70 per cent stake) for $16 billion two years ago.
Flipkart did not disclose details on the size of Walmart’s latest stake in the company. This investment is led by Walmart along with a group of existing shareholders, the statement said.
The other shareholders investing in Flipkart were not identified by the company.
“Flipkart Group today closed an additional $1.2 billion equity round to support continued development of its eCommerce marketplace as India emerges from the Covid-19 crisis,” the official release stated.
It further said that the investment will be received in two tranches.
“The investment is led by Walmart, Flipkart Group’s majority owner, along with a group of existing shareholders and values the company at $24.9 billion (about Rs 1.87 lakh crore) post-money. It will be funded in two tranches over the remainder of the fiscal year,” it added.
“Today, we lead in electronics and fashion, and are rapidly accelerating share in other general merchandise categories and grocery, all while providing increasingly seamless payment and delivery options for our customers,” Flipkart CEO Kalyan Krishnamurthy said.
The company will continue innovating to bring the next 200 million Indian shoppers online, he added.
Flipkart continues to leverage its culture of innovation to accelerate growth and enable millions of customers, sellers, merchants and small businesses to prosper and be a part of India’s digital transformation, Judith McKenna, President and CEO of Walmart International, said.