Multi-billion corporates in India are having dedicated funds to invest in startups for quite some time but large-scaled startups have shied away from doing so. However, Flipkart is trailing a blaze by setting up a $60 to $100 million fund to make strategic investments around its ecosystem.
Probably, this is the first instance where e-commerce firm in India has structured a dedicated fund for investments.
The e-commerce marketplace plans to invest majorly in areas including fintech, Saas and supply chain and aims to take up sizeable stake (close to 20-30 per cent) in early-stage startups in return.
Emily McNeal, the group CFO of Flipkart, will lead the fund.
“We are delighted to support such innovative early-stage startups that are working on next-gen technology in and around our ecosystem,” said McNeal to ET. The capital for the fund will come from Flipkart, added the report.
For this fund, Flipkart is setting up an investment committee, who will identify opportunities for early investment bets.
Flipkart has been investing in and acquiring startups through its Mergers and Acquisitions (M&A) team. So far, it has acquired 12 firms. The most recent acquisition was Upstream Commerce last year.
To counter its rival Amazon, the Indian e-tailer may heavily invest in personal loan and lending space with the new fund.
In the last few years, Amazon has through its previous investment been quietly setting up financial products. Apart from its $60 million investment in Bankbazaar, Seattle-headquartered e-tailer had poured in $22 million in online lender Capital Float, which offers loans to SMEs and Consumers. It also invested in insurance tech firm Acko General Insurance.
Last year, It had launched EMI through Amazon Pay to offer credit up to Rs 60,000 to customers. It also acquired Sequoia-backed Tapzo in a stress deal.
