Financial experts use the Flipkart example to demonstrate its awesome success story. Flipkart has been at the forefront of innovative business practices for some time now. With the buying of shares up to a three-fourth stake (77%) by Walmart, Flipkart has also been in the news for it's setting up its Hyderabad data-centre, its ambitious plans of offline grocery stores pan India, Its online 'Supermart' grocery stores in Mumbai, its bid to buy Fresh outlets from Namdhari and of course getting an all-clean chit from CCI in response to the challenge by the Association of Vendors.
The presently 22 billion $ valued Indian e-commerce retailer also has under its hood the successful acquisitions of PhonePe, Myntra and Jabong. Flipkart appears to be investing in a smart move in SME-finance, personal loans, technology startups, and technologies that can further their business platform in the rapidly developing e-retailing, FinTech, commerce, and financial sectors.
Their competitor on the e-commerce platform has also diversified into non-traditional spaces like fintech startups, EMI offers that are card-less, insurance-linked technologies, lending firms concentrating on SMEs, and payments that are contactless. In a move to stay a step ahead, they have introduced seller-loans, easy EMIs for buyers, etc by tying up their selling strategy with leading banks, and large lending fintech agencies. Their recent acquisitions of ensuring tech successful ToneTag and Acko Technologies and Capital Float in the space of FinTech can bolster their selling strategies.
Not one to take the competition lying down Flipkart is using its refurbished and highly talented M and A team to scour for investment options and use an internal 50 to 100 million dollar fund. Expected to be headed by its CFO Emily McNeal and its revamped fresh M and A team, Flipkart is looking to get in early by investing in young and early firms with great technologies underlying their growth. Depending on their promised growth levels, Flipkart may invest from its initial fund of 50 to 60 million dollars by acquiring stakes of up to 25 percent in such companies.
Flipkart has indeed made a smart move to leverage its business using tomorrow’s technologies, a structured investment approach and cashing on early lesser-valuation opportunities. The e-retailer-and-commerce successful Flipkart giant under the Walmart banner appears to strengthen its SaaS, supply chain, and technology-backed innovations through its investment foray.
Insider sources and a response to the Economic Times emailed query, bolster and confirm this though. Though the CFO did not comment on the areas of investment, it is rather obvious that they will strategically and in a structured financial foray, use their investments to further their business growth, which has grown to phenomenal heights over the last ten years.
Important factors that helped Flipkart succeed in the e-commerce industry in a mere decade are the ‘Digital India’ wave, technology spurts suited and truly next-generation like the blockchain technology, strategic governmental promotion of startups in the fintech sector and of course the huge database of potential customers who love the benefits of quality, price, ease-of-doing-business, and the innovative e-commerce platform.
In wrapping this discussion, investors, potential customers, and India as a whole are looking closely at their favorite e-tailer platform Flipkart, as it seeks to invest nearly 60 to100 million dollars, in firms that promise returns. Their recent and future investments appear to be on firms essentially at an early stage. Led by an efficient and result oriented acquisitions and mergers team headed by its CFO Emily McNeal this initiative has also spurred recruitments, changes to leadership and thought. It is also a great response to the diversification by its closest rival Amazon, and looks to develop a strong portfolio of young companies with a promising future, especially in the sectors of next-generation futuristic technology, unique, innovative and easy online digital payment services, fintech early-age firms, card-less payments, and financing and support of allied SME ventures.
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