US retail giant Walmart will lead a $1.2 billion (about Rs 9,045 crore) investment in Indian e-commerce company Flipkart to give it extra firepower to compete with Amazon and billionaire Mukesh Ambani's JioMart.
The fresh equity round values Flipkart, where Walmart acquired a majority stake for $16 billion two years ago, at $24.9 billion post-money, the two companies said in a statement.
Flipkart was valued at $20.8 billion two years ago. The 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.
Fresh capital will help Flipkart further grow its e-commerce marketplace in India as the world's second-largest internet market begins to recover from the COVID-19 crisis, Flipkart said.
"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.
In 2018, Walmart Inc had invested $16 billion for acquiring 77 per cent stake in the group. Flipkart's other investors include Tiger Global, Accel, Tencent, Microsoft and others.
"Since Walmart's initial investment in Flipkart, we have greatly expanded our offer through technology, partnerships and new services.
"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.
Both Amazon and Flipkart have pumped in billions of dollars over the past few years - ramping up warehousing and delivery logistics - as they aggressively expanded their footprint in India, a market where brick-and-mortar stores still account for a lion's share of the retail sector.
The fresh infusion also comes at a time when billionaire Mukesh Ambani-led Reliance Industries is making deeper inroads into the e-commerce segment with JioMart.
Founded in 2007, the Flipkart Group includes Flipkart, digital payments platform PhonePe, fashion specialty site Myntra and logistics and delivery services provider eKart.
Flipkart offers 150 million products across more than 80 categories and has recently surpassed 1.5 billion visits per month. It had reported 45 per cent growth in monthly active customers and 30 per cent growth in transactions per customer for FY20.
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.
"Kalyan and team have a clear vision and are relentlessly focused on giving Indians frictionless choice in how they shop and sell online. We're excited to see what the future holds as they continue their journey to become India's most trusted e-commerce marketplace," McKenna said.
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