Flipkart sets up internal fund to invest in early-stage startups

It is estimated to be a $60-100 million fund and will be led by Emily McNeal, the group CFO of Flipkart.
Flipkart sets up internal fund to invest in early-stage startups
Flipkart sets up internal fund to invest in early-stage startups
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Walmart-owned Indian ecommerce major Flipkart is taking firm steps to shore up its mergers and acquisitions (M&A) division with a view to making investments in startups. According to a report in Economic Times, the company has created a fund of $50 to $60 million and the typical per-ticket value could be $2 to $3 million. It is also learnt that Flipkart plans to take positions in startups in a range of segments that can have a direct bearing on its own operations. These could include supply chain technologies, fintech and SaaS.

The fintech area is particularly of importance since the ecommerce platforms are working on perfecting a model where the buyer is presented with a wide range of options like loans against purchases, card-less EMIs and so on. Funding sellers on the Flipkart platform is another area being looked at closely.  Its rival Amazon has already progressed ahead in these areas and Flipkart would not want to be left behind.

Flipkart’s group CFO Emily McNeal will reportedly head this division. “. We are seeing startups today trying to solve unique challenges that could help bring millions more into the digital fold helping contribute to ‘Digital India’ programme. With this initiative, we are delighted to support such innovative early-stage startups that are working on next-gen technology in and around our ecosystem,” ET quotes her as saying in an emailed response.

If there are good startups in these sectors working on innovative solutions, Flipkart’s team could pick them and make an investment of around 20-25% in them.

The existing M&A team within Flipkart is being expanded to make these plans work smoothly and the entire investment process made thoroughly professional. Flipkart has made acquisitions in its earlier avatar under the Bansals when fashion brands Myntra and Jabong were annexed and grown into leaders in their segments. Similarly, the digital wallet PhonePe was an acquisition by Flipkart on the digital payments front.

One may start hearing about the investments being made by Flipkart in the coming weeks and startups engaged in activities that could form part of the ecommerce ecosystem may line-up for funding from the Walmart-managed company.

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