E-commerce giant Flipkart, which was acquired by Walmart Inc. in May, is said to be in talks with strategic investors to raise fresh capital, reported LiveMint citing two people familiar with the development at the company.
The report also suggested that PhonePe, the payments arm of Flipkart, may also raise funds separately in order to compete with bigger rival Paytm. PhonePe may raise up to $1 billion separately next year to take on its bigger rival Paytm.
In May this year, US-based retail giant Walmart had acquired 77% stake in Flipkart for around $16 billion. However, Walmart has indicated that it is open to getting other strategic investors on board at Flipkart. Beside the retailer also indicated that it is willing to continue funding PhonePe.
Notably, PhonePe had already received $175 million, separately from the parent Flipkart, from Walmart last week, which was the part of $500-million commitment.
According to the LiveMint, a PhonePe spokeswoman confirmed that the payments firm had received a $175 million funds infusion from Walmart, but added that PhonePe was not looking to raise capital from outside strategic investors.
“We would like to confirm we that have got a fund infusion of $175 million to continue with our aggressive expansion plans in the offline and online space. This is part of the $500 million commitment that was made to us. Walmart has added these funds to help us compete even more aggressively, grow faster and take on competition,” the spokeswoman said in an email to Livemint.
To recall, in last September PhonePe announced that on its platform there were 7.47 million UPI transaction in August which is double that of 3.5 million UPI transactions in May this year. Thus, its share rose steadily from 39% in July and 36% in June to 45% in August and thus it has surpassed government’s BHIP app in number of transaction as well as in total shares.
In August 2017, PhonePe had announced that it has achieved a phenomenal $2.5 Billion total payment volume (TPV) annual runrate which the company claims is the fastest ramp up seen in India’s digital payments market to date.
After Walmart acquired Flipkart, there were discussions over on-boarding Google Inc. as an strategic investors to raise fresh capital, the discussion however collapsed as Sachin Bansal, one of the two co-foundres of Flipkart, exited the e-commerce firm.
Google is now said to be planning to launch its own e-commerce platform separately in India.