Google will buy a minority stake in Flipkart for $350 million in a new round of financing

The Walmart group company, the world’s largest online company, has proposed an investment of around $350 million (around Rs 2,900 crore) to buy a minority stake in e-commerce company Flipkart, the Walmart group company said on Friday.

According to sources, Flipkart is raising $1 billion in the ongoing funding round and has received an infusion of $600 million from its parent company and US retail giant Walmart.

“As part of the latest round of financing led by Walmart, Flipkart today announced that it will add Google as a minority investor, subject to regulatory and other customary approvals from both parties,” Flipkart said in a statement.

However, the e-commerce company did not disclose the amount proposed to be invested by Google or the details of the fund being raised by the company.

“Google’s proposed investment and cloud collaboration will help Flipkart expand its business and accelerate the modernization of its digital infrastructure to serve customers across the country,” Flipkart said.

The source said the deal in the ongoing round is expected to be worth around $35 billion.

Emails seeking comments from Google and Walmart on the financial details of investment commitments during the ongoing funding round did not prompt an immediate response, while Flipkart declined to comment on the matter.

Flipkart was valued at $35 billion as of January 31, 2024, based on equity deals by its US-based parent Walmart.

The US retail giant increased its stake by 10 per cent to around 85 per cent in FY24 by paying $3.5 billion, taking Flipkart’s enterprise valuation to $35 billion.

A source at Flipkart told PTI in March that the company’s GMV (gross merchandise value) grew 25-28 percent year-on-year to reach $29-30 billion in 2023 amid a decline in festival sales in 2022.

“In fact, if Flipkart were to be valued now, it would be valued at around $38-40 billion given GMV growth and near profitability. However, as of 2021, no such valuation has been done for Flipkart.” the source said.

Flipkart reported a net loss of Rs 4,846 crore and consolidated total net income of Rs 56,012.8 crore in fiscal 2023. The company’s total expenses in the reported fiscal year were Rs 60,858 crore.