Google will invest $350 million in the Indian e-commerce marketplace Flipkart

Google LLC is buying a $350 million stake in Flipkart Pvt Ltd., India’s largest e-commerce company.

Bloomberg reported that the search giant will provide capital in a funding round worth nearly $1 billion. The investment is said to be led by Walmart Inc., the majority shareholder of Flipkart. Last December, Walmart announced plans to invest $600 million in the e-commerce company.

Bengaluru-based Flipkart was launched in 2007 as an online bookstore. In the following years, the company expanded into other product categories through a series of acquisitions of competitors. Currently, the e-commerce market provides access to over 150 million products, and the user base includes over 400 million consumers.

One of the companies that Flipkart acquired in its acquisition spree was a mobile payments startup called PhonePe. When the deal closed in 2017, the e-commerce marketplace operator revealed it was worth $20 million. After the acquisition, PhonePe became the most popular mobile payment platform in India and was later spun off to become an independent company.

In 2018, Flipkart sold a 77% majority stake to Walmart for $16 billion. Last year, the brick-and-mortar giant increased its stake by purchasing $1.4 billion worth of shares from Tiger Global. At the time, the Wall Street Journal reported that the deal valued Flipkart at $35 billion, just below the $38 billion it was worth in 2021.

The new $1 billion financing round, to which Google will contribute $350 million, will reportedly raise the e-commerce company’s valuation to $37 billion. The amount of the stake that the search engine giant will receive in return has not been disclosed. However, the companies revealed that as part of the deal, Flipkart plans to increase its use of Google’s cloud platform.

“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 in a statement.

The deal comes about two years after Google announced a $1 billion investment in Bharti Airtel Ltd., one of India’s largest Internet providers. At the time, the companies detailed that about a third of the capital was committed to a series of go-to-market and product collaborations. Google before bought 7.73% stake in mobile network operator Jio Platforms Ltd., Bharti Airtel’s biggest competitor, for $4.5 billion.

Amazon.com Inc. is also making significant investments in India. Last year the company announced plans to invest almost $26 million in the country by 2030. The amount will be in addition to the more than $6.5 billion spent over the past decade to grow the local e-commerce market, which competes with Flipkart.

Picture: Flipkart