Bloomberg—Flipkart completed a fundraising round valuing the Indian online marketplace at $37.6 billion this week, with majority owner Walmart Inc. joining investors including SoftBank Group Corp. in injecting $3.6 billion of fresh capital. Walmart Inc. is No. 2 in the 2020 Digital Commerce 360 Top 500.
The funding round is a boon for Flipkart and U.S. retail giant Walmart, which bought a majority of the Indian company three years ago for $16 billion and has been working toward an initial public offering for the business. It has since carved out the payments arm PhonePe from Flipkart, a unit that could be valued at close to $10 billion, people familiar with the matter said.
“As we serve our consumers, we will focus on accelerating growth for millions of small and medium Indian businesses,” CEO Kalyan Krishnamurthy said in the statement.
Japan’s SoftBank, which had previously backed Flipkart and then sold its stake to Walmart at a handsome profit, is back as a shareholder. Investors are plowing billions of dollars into India’s consumer internet and software-as-a-service startups, which are growing rapidly and benefiting from the coronavirus pandemic.
The latest funding round could set up Flipkart for an initial public offering in the U.S. in 2022. The company is seeking capital as competition rises in India’s online retail market, with rivals Amazon.com Inc. (No. 1), Reliance Industries Ltd. and the Tata Group boosting spending to sign up more merchants and attract customers.
Flipkart, which has more than 350 million registered users, said it will increase investments in technology, supply chain and infrastructure as it focuses on categories such as fashion, travel and groceries.
In other news:
- Nordstrom Inc. (No. 20) is investing in Topshop, one of Britain’s best-known apparel brands, and several other labels owned by ASOS Plc Holdings, as the U.S. apparel chain tries to boost its appeal among younger shoppers. Nordstrom will become the only brick-and-mortar presence for the brands, and the chain will also offer buy online pick up in store services for Asos in North America. ASOS will retain control over the brand, while Nordstrom will help market it, giving the online-only retailer an edge in the North American market thanks to Nordstrom’s 350 stores. ASOS is No. 18 in the Digital Commerce 360 Europe 500.
- Installment payment provider Klarna this week acquired Hero, a social shopping platform that takes content created in stores to social platforms. Hero’s clients include Top 1000 retailers like Nike Inc. (No. 21), Levi Strauss & Co. (No. 181) and Rag & Bone (No. 654). Retail store employees use the service to offer advice, product reviews and other information to online shoppers through chat, video and social content. Terms of the deal were not disclosed.
- EBay Inc. will sell part of its stake in Adevinta ASA for about $2.25 billion to Permira in order to win regulatory approval for the companies’ plan to combine their classifieds businesses. eBay is No. 5 in the ranking of Digital Commerce 360 Top 100 Online Marketplaces. The deal for the 125 million shares is expected to close in the fourth quarter and will cut eBay’s ownership in the Norwegian digital marketplace to 34% from 44%, eBay said in a statement on Wednesday. Adevinta originally outbid larger rivals for eBay’s online classifieds business in a cash-and-stock deal last year. The Oslo-based company used its small size to its advantage by offering a significant amount of its shares to secure the deal, a structure that gave eBay a sizable stake in the new company and the potential to continue to profit from growth in the classifieds business.
- Amazon marketing agency Buy Box Experts has been acquired by Spreetail. The purchase price was not disclosed. Spreetail buys merchandise from consumer brand manufacturers to sell on more than 15 online marketplaces, including Amazon, Walmart and eBay. The Nebraska-based company operates six fulfillment centers in the U.S. and says it can deliver packages to 80% of U.S. addresses in one day and 99% in two days.
- Video chat editing service mmhmm raised $100 million this month. The service, which augments video taken from a computer or smartphone camera with graphics before passing it along to video chat services like Zoom or Skype, launched in 2020 to make the growing use of video chatting more dynamic. Retailers have adopted the service to make video consultations more appealing, as apparel brand Dayo has done to present fashion to customers shopping with its virtual appointment service.