Flipkart is reportedly looking for strategic investors to induct more funds into the ecommerce business. In addition to this, its payment arm PhonePe may also be scouting for more investments in order to take the battle to the larger rival Paytm.
According to a report in Mint, the idea of bringing in a strategic investor has been there from much earlier and Google was expected to be part of the overall deal in which Walmart bought 77% stake in Flipkart. But that deal did not materialize, and Flipkart presumably is now in talks with other investors.
For one, Google has plans to launch its own ecommerce venture in India and the other reason the Google deal fell through is reportedly one of the co-founders of Flipkart, Sachin Bansal, who was keen on bringing Google on board left the company before the Walmart deal got finalised.
As mentioned, PhonePe is also expected to raise funds on its own, over and above the $175 million it has received recently from Walmart. The total commitment to PhonePe from Walmart is $500 million. It is being speculated that as and when PhonePe sits down with prospective investors in its business, the amount sought could be in the region of $1 billion. However, PhonePe has officially denied that it is seeking funding and has said with the $175 million in, it is sufficiently funded for now. The spokeswoman of PhonePe has told Minyt that Walmart has, in principle, agreed to release further funds whenever needed and therefore the need for scouting for strategic investors from outside does not arise.
Whatever the real position, it cannot be denied that Flipkart is continuously in battle-mode with rival Amazon and with Walmart entering the fray, the battles could only get bloodier and funds will always be needed to wage these battles from a position of strength.