Just two months after entering the personal loan arena in collaboration with Axis Bank, ecommerce giant Flipkart is earmarking around $15 Mn – $20 Mn for an in-house credit marketplace.
The project is being spearheaded by senior VP Prakash Sikaria, who also leads Flipkart’s social commerce platform Shopsy.
According to an ET report, he is at the helm of creating a credit marketplace that will function as a separate entity within Flipkart and is expected to be ready by the end of this year or the beginning of the next.
Flipkart is said to be working on several products, and therefore, the ecommerce giant will invest the amount over time.
In addition to Flipkart and its parent company, Walmart, Sikaria will also hold a stake in the credit marketplace. Although the project may seek external funding in the future, the initial capital investment is reportedly substantial.
The marketplace will offer an array of credit products, including personal loans of up to INR 5 lakh. These products could potentially extend to external platforms and customers
Sikaria, a Flipkart executive since 2016, previously also contributed to the company’s consumer rewards programme, Supercoin.
Flipkart’s Many Financial Products
This foray into lending adds to Flipkart’s growing list of fintech products. It already offers a co-branded credit card with Axis Bank.
According to a report by The Arc, Flipkart is also developing an in-house underwriting model to streamline risk assessments ahead of loan distributions. Besides, it also has plans to launch a third-party app for UPI transactions.
Its closest competitor, Amazon, has also introduced fintech products via Amazon Pay, including recharges, bill payments and peer-to-peer transactions via UPI.
Amazon Pay has also become one of the top five UPI apps in the country in terms of the number and value of transactions, validating Flipkart’s reasoning for such a move.
Strategic Timing
The development of financial products coincides with PhonePe leaving the Flipkart group of companies. The credit marketplace is also being built with Flipkart’s backing as it offers data and patterns on buying behaviours and existing gaps in servicing them.
The ecommerce giant will look to leverage the combined user base of Flipkart and Myntra to reach an audience of close to 300 Mn, and shopping data and behaviour will be a key data differentiator for Flipkart in competing against Navi, CRED, Paytm and others in the space.
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