Flipkart begins talks to raise fresh capital
Inc.-owned Flipkart has initiated talks with strategic investors to raise fresh capital after discussions with Google Inc. collapsed earlier this year, two people familiar with the matter said.
Flipkart’s payments arm PhonePe may raise funds separately as it seeks to catch up with bigger rival Paytm, the people cited above said. PhonePe separately also received $175 million from Walmart last week, as part of the $500-million commitment, they added. Mint couldn’t ascertain the names of the investors Flipkart is talking to.
When Walmart announced its deal to buy out 77% of Flipkart for $16 billion in May, the US-based retail giant had indicated that it planned to bring more strategic investors on board at Flipkart at some point. Google was among the strategic investors Flipkart was in talks with at that time. But those discussions collapsed after the exit of Flipkart co-founder Sachin Bansal, who was keen to add Google to Flipkart’s shareholder roster. Bansal left the company in May. Google is now planning to launch its own e-commerce platform separately in India.
Flipkart did not respond to a request for comment.
If PhonePe also gets more strategic investors outside Walmart, it may look to raise up to $1 billion sometime next year, the two people mentioned above said.
For its part, Walmart has indicated that it is willing to continue funding PhonePe for the near future, but is open to the idea of bringing in other strategic partners, the people cited above said.
A PhonePe spokeswoman confirmed that the payments firm had received a $175 million funds infusion from Walmart, but added that PhonePe was not looking to raise capital from outside strategic investors.
“We would like to confirm we that have got a fund infusion of $175 million to continue with our aggressive expansion plans in the offline and online space. This is part of the $500 million commitment that was made to us. Walmart has added these funds to help us compete even more aggressively, grow faster and take on competition,” the spokeswoman said in an email.