As per a source who is privy to the developments, Google has injected $350 million into Flipkart without securing a board seat.
This takes the valuation of Flipkart to $36 billion.
Without disclosing the amount, the ecommerce giant confirmed the fact that the tech giant invested in them and also that Google would become a minority investor pending regulatory approval.
Flipkart’s Cloud Collaboration with Google, IPO Plans, Quick Commerce Initiative
Flipkart is planning to expand as well as modernize its digital infrastructure through a cloud collaboration with Google and the investment shall go in the same direction.
Notably, it is not the very first time that the company is partnering with a major tech player, Since in the year 2017, it shook hands with Microsoft and adopted Azure as its primary public cloud computing platform.
In order to enhance Flipkart’s data utilization for various business functions, Microsoft’s services, including the Cortana Intelligence Suite and Power BI were leveraged.
Contemplating to relocate its headquarters from Singapore to India, Flipkart is preparing for a public market listing, as per sources.
Noting Flipkart’s growth and profitability, particularly with its subsidiary Myntra, the CEO of Walmart, Kathryn J. McLay, indicated the company’s interest in an IPO during recent earnings call.
Aiming to offer faster delivery and diversify its product range, Google’s investment coincides with Flipkart’s efforts to bolster its quick commerce initiative.
The company, rather known for its delivery, is now expanding the same-day delivery to 20 Indian cities which would enable it to cater to more customers.
Previously foraying into quick commerce with Nearby in 2015 and Flipkart Quick in 2020, Flipkart is also looking out for such avenues. Notably, both were discontinued.
Flipkart’s Delivery Model, Financial Performance, and Growth Trajectory
Flipkart’s delivery model, prioritizing large warehouses over smaller ones, contributes to longer delivery times compared to Amazon, which operates more fragmented warehouses enabling quicker deliveries within 24 hours.
In FY23, company saw a revenue growth to ₹55,823 crores from previous year’s ₹50,992 crores. However, Flipkart’s losses widened to ₹4,897 crores from ₹3,413 crores during the same period.
The company is also in a lookout for cost cutting measures which include annual workforce reviews resulting in layoffs of about 5% of its workforce, roughly 1,000 employees, in January.
Flipkart, that was found in 2007 as an online bookstore, later evolved into a platform boasting over 500 million users and offering over 150 million products across 80+ categories, with subsidiaries such as Flipkart Wholesale, Flipkart Health+, and Cleartrip.
