Walmart Leads $1.2B Funding Round For Flipkart’s E-Commerce Biz

Flipkart has now closed an additional $1.2 billion equity round led by Walmart (WMT), Flipkart’s majority owner, along with a group of existing shareholders.

The investment, which values the company at a whopping $24.9 billion, is intended to support continued development of Flipkart’s eCommerce marketplace as India emerges from the Covid-19 crisis.

It will be funded in two tranches over the remainder of the fiscal year.

In 2018, Walmart Inc. invested $16 billion for a majority stake in the group- giving the company a valuation at the time of $21 billion. Its current valuation is now about 19% higher.

“We’re grateful for the strong backing of our shareholders as we continue to build our platform and serve the growing needs of Indian consumers during these challenging times,” Flipkart CEO Kalyan Krishnamurthy said.

“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. We will continue innovating to bring the next 200 million Indian shoppers online” he added.

Founded in 2007, the Flipkart Group includes Flipkart, digital payments platform PhonePe, fashion specialty site Myntra and eKart, a logistics and delivery service focused on solving the last mile in India’s Tier II and Tier III cities.

Flipkart recently surpassed 1.5 billion visits per month and reported 45-percent growth in monthly active customers and 30-percent growth in transactions per customer for FY20. The company’s other existing investors are Tiger Global, Tencent and Accel.

Walmart’s stock is up 11% year-to-date with a Strong Buy analyst consensus that breaks down into 19 Buy ratings versus 4 Hold ratings and no Sell ratings. The $138 average price target suggests 5% upside potential for the shares in the coming 12 months. (See Walmart’s stock analysis on TipRanks).

Oppenheimer analyst Rupesh Parikh says, “WMT remains a top grocery pick, and we believe the recent underperformance creates an attractive entry point for investors, especially in a more uncertain shorter-term backdrop following recent spikes in coronavirus infections.” He assigned a Buy rating to Walmart’s stock and set a price target of $145 suggesting 10% upside potential.

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