Flipkart invests Rs 22 billion more in wholesale subsidiary in India

Flipkart invests Rs 22 billion more in wholesale subsidiary in India

New Delhi, Dec 12: Flipkart has bagged a fund infusion of Rs 21.9 billion (approximately $300 million) for its wholesale arm in India, the second large cash infusion made by the Singapore-based firm since investments from the US retail giant.
According to documents filed with the Registrar of Companies, which were sourced from business intelligence platform Paper.vc, the investment was made by Flipkart Private Limited, Singapore, into Flipkart India Private Limited.
Flipkart’s parent entity had infused Rs 34.6 billion into Flipkart Internet, the marketplace unit, in September, ahead of its Big Billion Days sale. It had also invested Rs 4.5 billion in PhonePe in July, which was a part of the retailer’s commitment of $500 million to its digital payments arm in October 2017.
While Walmart’s $16-billion investment was largely done through secondary share purchases, the US retail giant also invested $2 billion into the firm as fresh equity investment. This capital is what Flipkart is expected to burn as it expands its new categories such as grocery and furniture and battles it out with Amazon.
Amazon, too, had injected Rs 22 billion into its India division, Amazon Seller Services, in November. This was the third infusion in FY19 for Amazon India to counter Flipkart post Walmart’s acquisition.
Amazon India had earlier received Rs 27 billion in August and Rs 26 billion in May.
According to a Barclays report earlier this month, both Amazon India and Flipkart are on a similar run rate of $11.2 billion in GMV for FY19. Hence, in the race to be India’s e-commerce leader, both Flipkart and Amazon are expected to continue to burn cash as they set sights on the next wave of 100 million customers from the untapped tier-II and tier-III markets.