E commerce major Flipkart has received internal fund infusion of $62 Mn from its parent company Flipkart Pvt. Ltd. Following this fresh fund infusion, Flipkart’s internal funding via its parent company has now reached almost $2 Bn.
As part of the same round, PhonePe also received $28 Mn from its Singapore based entity, according to Economic Times report. Much of this internal funding must have come from Walmart, which is a majority stakeholder in the company.
Walmart’s takeover of Flipkart in 2018 gave the Bengaluru based company much-needed funding muscle to compete with Amazon.
Flipkart’s internal funding has come at a critical time when the e commerce sector is facing the worst brunt due to the nationwide lockdown. The lockdown has almost eroded the businesses of all the e-commerce players, bringing them to a grinding halt.
In such tough situation, the internal funding will certainly help Flipkart to overcome the economic challenges. Additionally, it will help to put the company in a better position to efficiently respond when the lockdown is lifted.
As and when the nationwide lockdown is lifted, big e-commerce players like Flipkart and Amazon are expected to go full throttle to restart their businesses on a full scale.
As for Phonepe, the internal funding has come at a time when the competition in UPI payment segment has almost become cut-throat. Last week’s mega deal between Reliance Jio and Facebook has added new dynamism to India’s UPI industry. The deal is expected to fast track the entry of Whatsapp (owned by Facebook) in the payment space, which will take the competition to its peak.
While Whatsapp’s entry in the payment space will obviously prove monumental, reports of Paytm’s funding talks with tech giant Microsoft may have also ruffled the feathers of Phonepe and Google Pay.
In a nutshell, India’s UPI market has become so lucrative as well as competitive that none of the incumbent players can now afford to become complacent. And Phonepe’s latest funding infusion is probably a message to all its rivals that it is bracing up for the heighten competition.