Walmart-owned Flipkart has set up a USD 60-100 million fund to back early stage startups across fintech, supply chain and SaaS. The fund will be led by group CFO Emily McNeal, sources told Economic Times.
The capital for the fund will come from Flipkart’s balance sheet and will see the e-tailer cut cheques of about USD 2-3 million, ET reported. This approach will allow the e-tailer to take early bets at lower valuations to leverage technologies for its businesses.
Flipkart will put together an investment committee similar to an investment fund and bulk up its M&A team that will scout for these opportunities. It may use the funds to specifically target startups in areas like personal loans, finance and those which can lend to SMEs.
An anonymous source told ET that Flipkart will look to pick up anywhere between 20 to 25% stake in these early-stage companies in return.
The size of the fund was not confirmed by McNeal.
In an emailed response to ET’s query, Flipkart’s McNeal, said, “Flipkart's innovations have helped create much of the ecosystem on which the Indian e-commerce industry has thrived over the past decade. 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.”
Walmart had acquired a 77% stake in Flipkart last year valuing the Indian e-tailer at USD 22 billion.
Flipkart’s rival Amazon picks up equity stakes in Indian companies directly and through its investment arm, and its Alexa Fund, which recently pumped capital in Shuttl, a bus aggregator startup. The Seattle-headquartered firm has also invested in the fintech space including Capital Float, an SME lending startup, insurtech player Acko Technologies, and ToneTag which facilitates contactless payments.