Bengaluru- the e-commerce giant Flipkart is in preliminary discussions with a clutch of new investors to raise at least $1 Billion after it weighs an IPO in the United States around the fourth quarter in 2021.
The new funding series could double the valuation up to 2 billion dollars and it majorly depends upon the investors. The proceedings are mainly for expansion catalyzing valuation ahead of the Flipkart IPO as well as competing better with deep-pocketed rivals Amazon and Reliance Retail.
There are tons of new investors that participated in the fundraising- sovereign wealth funds, technology-focused financial groups, pension funds, the long-term passive folds, and private equity funds which involve CPPIB, CDPQ, and Carlyle.
Also, the existing bunch of investors are GIC of Singapore, Qatar Investment Authority to have been sounded out, one of the sources stated.
The company stated that these discussions are at the initial stage and may or may not fructify, the people pointed out.
Lastly, the main advisors for the US IPO will be JP Morgan and Goldman Sachs.
Also, it has been stated that “the capital raise is not being positioned as free IP but for expansion. The management believes that there is a lot of value that is dropped in each of its key verticals and the value of parts is more than the whole. YouTube also said that the price Discovery process is still on its move.”.
The news from the searchers and market analysis world expressed surprise that Walmart is not confusing any fresh bunch of capital in the business and instead largely seeking external funding series. Meanwhile, others said that this could be a good move as it might help set a valuation benchmark.
The sources suggest that Flipkart is likely to be valued at 28 to 30 billion dollars in this new round which is higher than its previous one but lower than the reported earlier ones it goes public.
According to the recent report of the data intelligence platform, Tracxn Walmart invested 1.2 billion dollars in Flipkart in July 2020 at a 24.56 billion dollars valuation to expand its shareholding to around 77.8%.