Flipkart Sets Up $100 Mn Internal Fund To Invest In Early Stage Startups

Walmart-owned Flipkart has set up an internal fund to invest across early stage startups in order to further strengthen its ecommerce operations.

The fund size is estimated to be around $60 Mn – $100 Mn (INR 414 Cr – INR 691 Cr) and the venture will be led by Emily McNeal, who serves as the group CFO of Flipkart.

With this fund, Flipkart is looking to invest around $2 Mn – $3 Mn (INR 13 Cr – INR 20 Cr) in startups working across financial technology, supply chain, and SaaS with an aim to get hold of 20% to 25% stake in these companies, ET reported.

The ecommerce giant has been making investments through its mergers and acquisitions (M&A) team. With the launch of the fund, the company is looking to make a structured move to take early bets at lower valuations to leverage technologies for its businesses.

According to ET sources, the company will also put together an investment committee similar to an investment fund and bulk up its M&A team which will look for these opportunities. The company is also looking to ramp up the team with new talent and leadership.

“With this initiative, we’re delighted to support such innovative early-stage startups that are working on next-gen technology in & around our ecosystem. The aim is to seed innovation that is good for India and which promotes digital inclusion in a variety of spaces, by enabling startups to focus on bringing their ideas to life and scaling them,”  Flipkart group CFO Emily McNeal said in a statement.

Flipkart has till now made some big ticket acquisitions such as Jabong, Myntra and PhonePe to expand its offerings. In 2018, Flipkart reportedly considered investing $25 Mn in at least one artificial intelligence (AI) startup based in Silicon Valley.

With this internal fund, Flipkart may target startups working in areas such as personal loans, check out finance and those which can lend to SMEs to counter rival Amazon.

The Jeff Bezos-led company has already forayed into the lending space with its cardless EMIs and also partnered with multiple banks and fintech startups to extend loans to their sellers. In order to stay ahead in the race, Flipkart is now planning to double down on the lending space.

This development comes in at a time when Flipkart is looking to leverage advanced technologies to streamline its business. Last week, it was reported that the ecommerce company has deployed around 100 automated guided vehicles in one of its delivery hubs in the outskirts of Bengaluru to help sort packages and streamline its supply chain. It is also planning to deploy automated vehicles in other delivery hubs across the country.