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SoftBank returns to Flipkart’s cap table with a USD 3.6 billion funding round

Written by Moulishree Srivastava Published on     3 mins read

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The new funding marks the re-entry of SoftBank on Flipkart’s cap table after three years.

Indian e-commerce major Flipkart has raised USD 3.6 billion in a fresh funding round co-led by SoftBank, Singapore’s GIC, Canada Pension Plan Investment Board, and parent Walmart, the company said on Monday. This is the first external funding Flipkart has raised since Walmart bought a 77% stake in the company for USD 16 billion at a valuation of USD 21 billion in May 2018.

Tiger Global, Tencent, Willoughby Capital, Antara Capital, and Franklin Templeton also participated in the round along with sovereign funds DisruptAD, Qatar Investment Authority, and Khazanah Nasional Berhad. The deal values the Flipkart  Group—which entails Flipkart, fashion portal Myntra, B2B arm Flipkart Wholesale, and recently acquired online travel portal Cleartrip—at USD 37.6 billion, post the transaction.

The development comes as the Bengaluru-based company gears up to go public, eyeing a valuation of USD 50 billion next year. The e-tailer was earlier reportedly aiming for a public listing in the US in the fourth quarter of 2021.

The new funding marks the re-entry of the Masayoshi Son-owned Japanese conglomerate on Flipkart’s cap table after three years. Previously, SoftBank had invested USD 2.5 billion in Flipkart in August 2017, but sold approximately 20% of its stakes to Walmart for USD 4 billion, raking in a profit of USD 1.5 billion a year later during the buyout.

“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 consumers in the decades to come,” said Lydia Jett, partner, SoftBank Investment Advisers.

The other two noteworthy backers in the round were Tiger Global and Tencent, both of which held stakes worth over USD 1 billion till mid-last year. The Chinese internet giant increased its stake in Flipkart in September 2020 with an investment of about USD 62.8 million, which reportedly was a part of Walmart-led USD 1.2 billion round in July 2020.

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The company plans to use new funds to invest in new categories, enhance the consumer experience, and develop a “world-class” supply chain, Kalyan Krishnamurthy, chief executive officer, Flipkart Group, said in a statement. The Bengaluru-based online retailer is set to sharpen its focus on grocery and the online fashion category, where it has a major market share.

In its bid to deepen its relationship with grocery stores, locally known as kiranas, Flipkart is working with more than 1.6 million kiranas in India through its wholesale business and its last-mile delivery program.

Flipkart, which claims to have more than 350 million registered users and 300,000 registered sellers from across the country, has also been investing in key categories, including fashion, travel, and grocery, that reflect India’s maturing digital commerce industry, the company said. Earlier this month, it got into the social commerce segment with the launch of a separate app, Shopsy.

The recent funding will help the company in strengthening its position in the market as the competition to grab a bigger pie of the soon-to-be USD 111 billion e-commerce market has intensified with Reliance rolling out its e-commerce venture JioMart last year, and Amazon India spreading its footprint deeper in the country.

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