Flipkart Parent Invests $90 Mn In Indian Marketplace Arm

Ecommerce major Flipkart’s Singapore-based parent has invested INR 722 Cr ($90 Mn) in its Indian marketplace arm.

As per regulatory filings accessed by Inc42, the resolution to pump new capital into Flipkart Internet was approved by its board on December 29 last year. The development was first reported by The Economic Times.

The fresh capital was raised from two entities – Flipkart Marketplace Private Limited and Flipkart Private Limited, which are domiciled in Singapore. It was not immediately clear where the ecommerce giant intends to deploy the funds. 

Questions on the issue sent to Flipkart remain unanswered. The story will be updated when the company responds to it. 

Flipkart is headquartered in Singapore and operates a clutch of subsidiaries in India. While Flipkart Internet operates the marketplace, Flipkart India is the B2B arm of the company. 

The new fundraise comes close on the heels of Flipkart’s Singapore-based parent investing close to INR 1,600 Cr in Flipkart India in October, 2022. 

Flipkart’s Increasing Losses

The investment comes a couple of weeks after Flipkart hived off digital payments platform PhonePe from its Singapore-based parent entity. The move also created more liabilities for the ecommerce major as it announced an undisclosed cash payout for employees parting from PhonePe. 

The separation and subsequent relocation of PhonePe to India is also said to have raked up $1 Bn in taxes for Walmart and other other shareholders of PhonePe.

Meanwhile, losses continue to pile up and have burned a big hole in the pockets of its investors. Flipkart Internet reported a standalone net loss of INR 4,361 Cr in the financial year 2021-22 (FY22), up 1.5X from INR 2,881.3 Cr in FY21. 

The B2B vertical has not performed any well either. Flipkart India saw its losses balloon to INR 3,404.4 Cr in FY22 from INR 2,444.8 Cr in the previous fiscal year.

Despite this, the startup continues to scale up its offerings and launch new verticals. In late December, it forayed into the after-sales segment through its arm Jeeves. Prior to that, it also partnered with Ethereum Layer-2 scaling startup Polygon to accelerate Web3.0 adoption.

Notwithstanding the losses, the company has been on an acquisition spree in the past two years, making multiple acquisitions such as Cleartrip, Sasta Sundar, and ANS Ecommerce.

Flipkart’s biggest competitor Amazon has also been facing a myriad of issues in India from losses to layoffs. Amazon India has also shut as many as three of its businesses in the country as a result of the ongoing market volatility and downturn. 

However, Flipkart could see further growth largely on the back of growing smartphone and internet penetration. As per Inc42, India’s addressable ecommerce market is projected to reach $200 Bn by 2026. 

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