Google has announced plans to invest approximately USD 350 million (around Rs 2,900 crore) for a minority stake in the e-commerce giant Flipkart, as part of a new funding round, the Walmart-owned company revealed on Friday.
Flipkart is currently in the process of raising USD 1 billion in this funding round, with a significant USD 600 million commitment already secured from its parent company, Walmart, according to sources.
"As part of the latest funding round led by Walmart, Flipkart today announced that it will be adding Google as a minority investor, subject to receipt of regulatory and other customary approvals by both parties," Flipkart stated.
The e-commerce company did not specify the exact amount Google intends to invest or further details regarding the funds being raised. "Google's proposed investment and its cloud collaboration will help Flipkart expand its business and advance the modernization of its digital infrastructure to serve customers across the countr" Flipkart added.
Sources estimate the current transaction values Flipkart at around USD 35 billion. Inquiries sent to Google and Walmart regarding the financial specifics of their investment commitments did not receive immediate responses, and Flipkart declined to comment on these details.
As of January 31, 2024, Flipkart was valued at USD 35 billion based on equity transactions conducted by Walmart, its US-based parent company. In the fiscal year 2024, Walmart increased its stake by 10 percent to approximately 85 percent by investing USD 3.5 billion, elevating Flipkart's enterprise valuation to USD 35 billion.
A Flipkart source previously informed PTI in March that the company's gross merchandise value (GMV) grew by 25-28 percent year-on-year, reaching USD 29-30 billion in 2023, despite softer festival sales in 2022.
"In reality, if the valuation was to be done now for Flipkart, it would have gone by to the vicinity of USD 38-40 billion considering the growth in GMV and near profitability. But no such valuation exercise has happened for Flipkart since 2021," the source added.
For the fiscal year 2023, Flipkart reported a net loss of Rs 4,846 crore and a consolidated net total income of Rs 56,012.8 crore. The company's total expenses amounted to Rs 60,858 crore for the same period.
