The US retail giant Walmart has announced a substantial investment of $3.5 billion to increase its ownership stake in Flipkart.
During the first half of 2023, Flipkart also secured $700 million in fresh equity funding for its subsidiary, PhonePe, underlining its commitment to expand its presence in the digital payments space.
Walmart’s investment during this period was primarily directed towards acquiring shares from select non-controlling interest holders of Flipkart. Walmart’s filing indicates that it also settled outstanding liabilities with former non-controlling phone holders of PhonePe.
Walmart betting on e-commerce
The acquisition of shares from these non-controlling interest holders was facilitated through transactions with hedge fund Tiger Global and Accel Partners.
Additionally, the retailer acquired the remaining stake held by Flipkart co-founder Binny Bansal. In 2018, Walmart acquired a 77% stake in the Indian e-commerce company. According to the Times of India, the total ownership stake in Flipkart is expected to rise to approximately 80.5%.
The Indian e-commerce company’s performance in August revealed robust growth, with its Gross Merchandise Value (GMV) performing well and a notable 26% rise in e-commerce sales during the June quarter of the fiscal year.
Flipkart’s future
Walmart’s president and chief executive officer, Judith McKenna, commented on the positive performance: “Both our businesses in India, Flipkart and PhonePe, had strong quarters as well. A lot of that is driven from just really being close to the customer in those markets and the combination of value and convenience that we’re now able to offer.”
Furthermore, Mahindra Logistics Ltd announced a strategic collaboration with Flipkart, providing a dedicated fleet of heavy commercial vehicles, route management assistance, and network operations support for Flipkart’s pan-India operations.
This partnership, which leverages 32-foot single-axle Heavy Commercial Vehicles (HCVs), underscores Flipkart’s commitment to enhancing its supply chain capabilities and ensuring efficient nationwide logistics.
This substantial investment not only underscores the retailer’s continued commitment to the Indian e-commerce market but also sets the stage for further growth and development in the rapidly evolving digital commerce landscape.
Looking ahead, Walmart intends to list Flipkart on stock exchanges, a strategic move aligning with its long-term vision for its Indian operations.
About the author
Marce has contributed tech to various prominent publications since 2018, offering a transparent perspective into the tech industry and its effects on its users. She now spends her time developing insightful content for industry players. You know, when she's not gaming or geeking out about the latest fad.
