Flipkart to Invest $20 Million in New In-House Credit Marketplace Startup
Three points you will get to know in this article:
- Senior VP Prakash Sikaria, the leader of Flipkart’s Shopsy social commerce platform, is spearheading the project.
- Sikaria will hold a stake in both Flipkart and its parent company, Walmart, as well as the credit marketplace.
- The marketplace will provide various credit options, including personal loans up to INR 5 Lakh.
Flipkart, the prominent e-commerce giant, is earmarking approximately $15-20 million to support the development of an in-house credit marketplace startup led by its senior executive, Prakash Sikaria. This information has been confirmed by multiple sources familiar with the situation.
Prakash Sikaria, a Senior Vice President within the company, previously responsible for spearheading Flipkart’s social commerce platform, Shopsy, and charting its growth trajectory, is now dedicated to establishing a credit marketplace. This marketplace will operate under the Flipkart umbrella, with the newly allocated capital being strategically invested to fuel its growth and operations.
The investment will be made incrementally since the team is actively engaged in developing multiple products. Sources indicate that the platform is anticipated to be fully operational either by the close of 2023 or in the early months of the following year. It’s worth noting that ET originally broke the news on May 17th, shedding light on Sikaria and Flipkart’s intentions to establish this venture internally.
Sikaria stands as a key stakeholder within the credit marketplace, alongside the retail giant Walmart-owned Flipkart. Looking ahead, there’s a possibility that the company may entertain external funding in a subsequent phase. At the moment, this represents a substantial investment from Flipkart into Sikaria’s venture, all the more noteworthy given the backdrop of a broader slowdown in funding within the industry.
Sikaria’s enterprise has already delved into the realm of credit products, offering personal loans of up to Rs 5 lakh on the Flipkart platform. However, it’s worth noting that these credit offerings are poised to become accessible to external customers and platforms as well.
“Slkaria had always been in the process of developing a personal loan product, with the intention of eventually migrating it to the new entity. Flipkart, being a significant customer, was expected to play a pivotal role in this venture,” revealed an individual familiar with the situation.
Despite reaching out to Flipkart via email, there has been no response regarding this matter. This development aligns with Flipkart’s growing emphasis on financial services, as the Bangalore-based e-commerce giant increasingly emphasizes the importance of having its own financing and payment solutions. A notable example of this is its advanced integration efforts to launch its own third-party app on the Unified Payments Interface (UPI), as initially reported by ET on May 16th.
This aligns with the moment when the Flipkart group decided to separate from PhonePe, which now operates independently. However, it’s worth noting that Walmart retains a significant ownership stake, while other notable investors such as General Atlantic and Tiger Global also have a stake in PhonePe. Initially, Flipkart had intended to introduce its own UPI service during the flagship festive season sale known as BigBillionDays.
Furthermore, Flipkart’s support extends to the development of a credit marketplace. This marketplace is being nurtured using valuable data and insights into consumer purchasing behaviors. It also aims to address existing gaps in consumer services.
For Flipkart, this remains an exciting experiment, led by one of its seasoned executives who is spearheading an internal venture right from its inception. Flipkart, renowned for nurturing a vast network of entrepreneurial talents who have contributed to the e-commerce giant’s success, not only supports nascent startups through its venture arm but has also made strategic investments in companies like Ninjacart, a pioneering fresh produce supply chain startup. Notably, Flipkart Leap has just unveiled its intentions to welcome a fresh wave of applications for its accelerator program.
Back in 2016, Sikaria embarked on his journey with Flipkart as a senior director and has since played a pivotal role in shaping Flipkart’s Supercoin, an enticing rewards program designed to delight consumers.
Flipkart’s substantial investment of $15-20 million in Prakash Sikaria’s in-house credit marketplace startup underscores the company’s commitment to diversifying its financial services offerings. As Flipkart continues to prioritize innovation and expansion, Sikaria’s venture represents an exciting opportunity to address gaps in consumer services and leverage valuable data insights. With an anticipated launch by the end of 2023, this strategic move demonstrates Flipkart’s dedication to staying at the forefront of e-commerce and financial technology, solidifying its position as a pioneering player in the industry.
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