Flipkart to invest in new businesses like PhonePe, Fintech
1. Flipkart had recently raised $1.4 billion in its biggest fundraising round with investors including Tencent Holdings, Microsoft Corp and eBay Inc
2. After latest fundraising round, the e-commerce firm will now be valued at $11.6 billion
Homegrown e-commerce major Flipkart announced on Wednesday that it proposes to invest large sum of money raised through its recently concluded fundraising round into new businesses such as PhonePe and Fintech on account of growing opportunities in the online money transfer segment, PTI reported.
"A large part of the money raised from the latest deals struck with Tencent, Microsoft and eBay, will be invested in new businesses, especially PhonePe and Fintech," the news report said quoting Flipkart's co-founder and chief executive officer Binny Bansal, as saying.
According to Reuters report dated April 10, the e-commerce company had recently raised $1.4 billion in its biggest fundraising round to date in an attempt to compete with the US leading online retailer Amazon Inc to grab a larger pie of India's booming online retail market.
According to Binny, there is an immense opportunity on the payments side as large chunk of business comes from people sending money to each other online.
"Yeah, opportunities are definitely there on the payment side becoming a business on its own. Even if you look at the business today, a large part of the business comes from people sending money to each other on phone pay, UPI platform," PTI reported quoting Binny as saying to ETNow channel.
Flipkart was also going to invest 'heavily' in other new businesses like grocery, furniture and private labels, PTI reported citing Binny as stating.
Companies like social media and entertainment firm Tencent Holdings, the world's biggest software company Microsoft Corp and online marketplace eBay Inc participated in the Flipkart's latest fundraising round, cited the Reuters news report quoting Flipkart as saying in a statement released on Monday this week.
Through its latest fundraising round, the e-commerce firm will now be valued at $11.6 billion.
The fundraising also comes amid speculation that Flipkart may be interested in a takeover of smaller rival Snapdeal, cited the Reuters report. Local media have reported SoftBank Group is keen to sell its stake in Snapdeal in exchange for a stake in Flipkart.
On questioned whether forging a partnership with eBay was necessary at all, Binny said they were very excited about it because it would provide a global platform for Indian sellers to sell their products, according to PTI report.
"The eBay partnership and eBay funding has a very strategic lens to it. We are really excited about it. We see a big opportunity in global as well as domestic markets. This will allow lakhs of Indian sellers to sell their products globally. Flipkart has huge capability of adding sellers on to the market place," he said.
On how difficult it will be to integrate operational, technological and cultural dots of the three entities, Binny said, "For instance, we have not integrated Myntra. We have allowed it to grow independently and also let their culture thrive."
He further added that the partnership does not bring just capital, but actually brings a lot of new opportunities with it.