Flipkart will raise $1.2 billion in funding led by majority owner Walmart Inc (WMT.N), the Indian e-commerce firm said on Tuesday, as it looks to compete better with Amazon.com Inc (AMZN.O) in a coronavirus-hit market.
The investment, also funded by other existing shareholders, values Flipkart at $24.9 billion, and comes two years after U.S. retail giant Walmart paid $16 billion for a more than 70% stake in Flipkart.
Besides Amazon, Flipkart faces competition from local online grocery upstart JioMart, backed by billionaire Mukesh Ambani, in a key growth market for e-commerce.
Ambani’s Reliance Industries Ltd (RELI.NS) has received billions of dollars in recent weeks from major global firms for its digital arm, which is expected to roll out an online service for Indian grocers and small businesses.
Amazon’s revenues have soared this year due to higher sales of groceries and household staples during the coronavirus pandemic, and in India, the Jeff Bezos-led company is now hiring 50,000 temporary workers to meet a surge in online shopping.
Flipkart said it would use the funds, to be received in two tranches this fiscal year, to support the “development of its e-commerce marketplace as India emerges from the COVID-19 crisis.”
Coronavirus-induced lockdowns restricted business activities in India for much of April and May. India is currently grappling with a surge in infections, making it the third worst-hit nation behind Brazil and the United States.
Flipkart had a “significant sales decline” in April, Walmart said in May.
The Bengaluru-based firm said monthly active customers jumped 45% during the year ended March 31.
Flipkart’s other investors include China’s Tencent (0700.HK), U.S. hedge fund Tiger Global, Microsoft (MSFT.O) and co-founder Binny Bansal.