Flipkart said to be in talks with CPPIB and Wal-Mart to raise $1 bn
Bengaluru-based e-commerce firm and India's biggest e-tailer Flipkart Ltd is reportedly in talks with world's largest retailer Wal-Mart Stores Inc. and Canadian fund CPPIB to raise funds.
Flipkart is trying to raise $1 billion in the next round of funding, The Hindu BusinessLine reported on Sunday.
In a reply to an email seeking comment, sent by Techcircle to Flipkart, a company spokesperson said that, "It is our policy not to comment on rumours or speculations."
The report, quoting two unnamed sources, said that if this deal goes through, it would be Canada Pension Plan Investment Board's (CPPIB) first investment in an internet company in India.
The report also said that Flipkart is also talking to Wal-Mart for a minority stake sale.
There have been several media reports, in the past three months, surfacing on the same lines.
Flipkart's outgoing CFO Sanjay Baweja, in an interview to Techcircle, had said that, "There is no absolute aggressive fundraise programme. As of now, we are not doing anything. There is enough runway available. Funds are available for more than two years. That is one aspect. But yes, one or two transactions will continue to happen."
He also added, "If there are investors who want to talk to us, whether strategic or financial, we will continue those (talks). But are we aggressively pursuing or running a process? That is not true."
While it is undeniable that Wal-Mart is a global giant that employs around 2.3 million people in its 11,527 stores across 28 countries and churned $482 billion in total revenue last year, it is definitely worried about its declining online sales in the US while Amazon continues to grow impressively, both in the US and India.
Also, Wal-Mart's online sales were a mere $13.6 billion in 2015 against Amazon's $107 billion.
The retail giant has been looking to expand its e-commerce play both in the US and international markets.
Baweja had stepped down from Flipkart last month, but he will continue working till the end of this year.
In the meanwhile, Flipkart had made interim changes in its finance management vertical. As a part of the interim organisational change, commercial, taxation, accounting and treasury functions will be consolidated under Rajnish Baweja, the group finance controller of Flipkart.
Business finance has been reporting to Nitin Seth, who is currently the chief administrative officer, as part of the "strategy to execution" function. Corporate affairs and campus functions will also report to Seth.
Presently, Flipkart stands strong in India but arch rival Amazon is close at its heels.
Citing comScore data a few months ago, the Indian arm of the US-based e-tailer claimed to have overtaken Flipkart as the most visited e-commerce site in India.
Earlier, citing data from an unnamed logistics company that services online retailers, The Economic Times had reported that the market share of Flipkart and Snapdeal fell to 37% and 15% from 43% and 19%, respectively while Amazon's market share grew between 21% and 24% from 14% in 2015.