Flipkart Internet gets $90 million cash infusion from Singapore parent

Flipkart Internet, the marketplace arm of e-commerce firm Flipkart, has received about $90 million as a fresh infusion from its two Singapore-based entities Flipkart Marketplace Pvt Ltd and Flipkart Private Ltd, a report in the Economic Times (ET) said. Flipkart is owned by Walmart. 

The infusion, which is the first in 2023, was approved on December 29, 2022. The main source of revenue of Flipkart Internet is the commission from the sellers, advertising and other seller services to merchants. In March 2022, Flipkart Marketplace received $550 million from Walmart. 

The cash infusion is expected to help Flipkart in competing with US-based Amazon for leadership in the Indian e-marketplace. Amazon has reportedly fired 1,000 employees in India as part of its global layoffs. The pressure is mounting on Flipkart as well. 

In 2022, Flipkart Internet posted a 33 per cent rise in operating revenue to Rs 10,476 crore but its losses widened to nearly Rs 4,400 crore. In 2018 too, Flipkart Internet had received Rs 3,462 crore from Flipkart Marketplace. 

Flipkart also announced its separation from PhonePe which it acquired in 2015. Both of these companies are still a part of the Walmart Group. The company has paid $1 billion in tax after the separation for domicile change. 

"Walmart has already paid most of the Rs 78 billion ($943.01 million)that was incurred as a capital gains tax after PhonePe investors sold their stake in the Singapore entity and invested in the Indian entity following the domicile change," a source with direct knowledge of the matter had told Reuters earlier this month. 

In the process, the company announced a $700 million one-time cash payout to 25,000 employees. 

"We are pleased to announce that employees, who are holders of Flipkart ESOPs (employee stock option plans), will receive a one-time discretionary cash payout as part of the transaction. This payout represents the value of the PhonePe holding within those Flipkart options," Kalyan Krishnamurthy, CEO of Flipkart, told employees in an internal mail in December.