Tencent has invested $ 62.8 million in Flipkart through parent entity Flipkart Pte of the Singapore-based Indian e-commerce giant, regulatory documents show. The fresh infusion is probably part of Flipkart’s $ 1.2 billion round which was led by Walmart in July of this year.
Walmart had already infused $ 660.25 million in two tranches in July. In the same month, The Qatar Investment Authority had also invested $ 8.14 million, regulatory filings show. With the latest tranche of funding, Flipkart has raised a total of $ 731.20 million in 2020.
Assuming the latest investment is part of the round, the remaining tranche of $ 469 million has yet to be raised. According FintrackrEstimate, the retail conglomerate led by Doug McMillon owns 81.87% of Flipkart is worth $ 18.9 billion and the e-commerce market it has been valued at around $ 23 billion after the new allocation.
Tencent remains the second largest shareholder in the e-commerce market, increasing its share of 5% to 5.34% and a value of $ 1.21 billion after the last investment made through its subsidiary Aceville.
The Chinese tech giant’s capital injection into Flipkart came at a time when India and China are locked in a fierce border confrontation in the Ladakh region. When the first incidents were reported, the Indian government took steps to counter and control the growing incidence of China-backed funds and companies investing in Indian startups.
The Indian government amended its FDI policy to halt investment in Indian companies and startups through the automatic route of entities based in neighboring countries, especially with an eye toward China. It also banned several Chinese and China-linked apps, a move that is seen as making India self-sufficient on many fronts.
While Tencent could have chosen Singapore to circumvent the new rules and comply with its latest investment in India, its recent investment in the music streaming and podcast app Gaana was made through debt through its European subsidiary Tencent Cloud. Importantly, this is Tencent’s fourth investment in the Indian internet space this year with the investment in accounting software firm Khatabook and Pratilipi as well.
The new infusion is crucial for Flipkart, as the company has been gearing up for its two best business months of the year: October and November. Both Flipkart and Amazon have been posting extraordinary sales for the past 4-5 years during these two months of festivals in India.
Tiger Global remained the third largest shareholder controlling 4.84% worth $ 1.1 billion according to Fintrackrit is estimate. Microsoft Global Finance and Qatar Investment Authority holdings were worth $ 328.3 million and $ 323.7 million, respectively.
Flipkart’s first institutional investor, Accel, still controls a 1.31% stake valued at $ 297.65 million.
