On Friday, Flipkart began paying its employees a $700 million “one-time discretionary” cash distribution, the single-largest such payment in the Indian startup sector.
Employees are receiving compensation from the Walmart-backed startup with offices in Bengaluru as a result of the devaluation of Flipkart’s stock caused by the split of fintech PhonePe from the e-commerce company.
Late last year, the two companies completed a full ownership split in a move designed to enable shareholders in both companies’ Singapore corporations to directly purchase shares in PhonePe’s India entity. In addition to breaking away from Flipkart, PhonePe has relocated its headquarters to India, raised $850 million in recent quarters, and entered new markets, such as e-commerce, as it builds up its war fund.
Flipkart Group CEO Kalyan Krishnamurthy stated that the “much-awaited compensation will be made today” in an email to staff sent earlier on Friday.
“We have exciting times ahead,” he continued, “and as we continue to grow across businesses, I look forward to your continued dedication and determination to bring about the future that we envision and scale new heights together.”
A Flipkart representative confirmed the payout to TechCrunch. The business declined to disclose the precise number of employees receiving the payment, but the local media has estimated that number to be around 18,000.
The payment was made at a time when Flipkart was considering another round of investor financing.
The company, which competes with Amazon in India, raised $3.6 billion at a $37.6 billion valuation in the middle of 2021.
According to a source with direct knowledge of the situation, Flipkart, which has financial backing from Tiger Global and SoftBank as well, has already used up the majority of that money.