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Ecommerce major Flipkart is allocating about $15-20 million for the credit marketplace startup being set up internally by its senior executive Prakash Sikaria, multiple people aware of the matter said.
Sikaria – a senior vice president at the firm who was heading the firm’s social commerce offering Shopsy and steering its growth charter – is building a credit marketplace that would be housed as a Flipkart entity, where the new capital would be invested.
The investment will be done gradually as the team is working on several products, and the platform is expected to be ready by end-2023 or early next year, sources added. ET had first reported on May 17 about Sikaria and Flipkart’s plans to set up this venture internally.
Sikaria is a shareholder in the credit marketplace along with Walmart-owned Flipkart. Eventually, the firm may be open to external funding at a later stage. For now, this is a significant amount of capital being committed for Sikaria’s venture by Flipkart, even as the industry is faced with a broader funding slowdown.
Sikaria’s venture has already worked on credit products like personal loans of up to Rs 5 lakh on Flipkart, but these credit products would be open to external customers and platforms as well.
“Personal loan product was always being built by Sikaria with the idea it would be migrated to the new entity, and Flipkart would be one of the key customer of the same,” a person aware of the matter said.
An email sent to Flipkart did not elicit any response on the matter.
Flipkart’s focus on credit solutions comes when the Bengaluru-based web retailer is increasingly prioritising having its own financing and payments solutions. For instance, it is in advanced stages of integration to go live on Unified Payments Interface (UPI) with its own third-party app, which was first reported by ET on May 16.
This coincides with Flipkart group’s separation from PhonePe, which is now run as a separate entity but is majority owned by Walmart along with investors like General Atlantic, Tiger Global and others. Flipkart’s initial plan had been to launch its own UPI service during the flagship festive season sale of BigBillionDays.
The credit marketplace is also being built with Flipkart’s backing as it offers data and patterns on buying behaviours of consumers along with existing gaps in servicing them.
For Flipkart, this is still an experiment where one of its senior executives is setting up a venture internally from the start. Flipkart – which is known for having one of the largest networks of entrepreneurs who have worked at the etailer – also invests in early-stage startups through its venture arm, besides having invested in firms like Ninjacart – a fresh produce supply chain startup. Flipkart Leap recently announced plans to invite a new batch of applications for the accelerator programme.
Sikaria had joined Flipkart in 2016 as a senior director and has been involved with Flipkart’s Supercoin – a rewards feature for consumers.
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