Walmart Inc. is pouring more firepower into its fledgling financial venture, scoring a $2.5 billion valuation for the startup and signaling its ambition to wade deeper into financial services.
The world’s largest retailer is leading a funding round of more than $300 million alongside investment firm Ribbit Capital, according to people with knowledge of the matter. That marks a fresh valuation for the firm called One, majority-owned by the retail giant, which has been offering products targeting Walmart’s legions of customers and employees to gain a bigger foothold in financial services.
For the financial industry, the specter of companies like Walmart encroaching on their turf has loomed large. Just last year, JPMorgan Chase & Co. chief Jamie Dimon identified the competitive threat of businesses like Walmart, labeling their hundreds of millions of customers and the enormous resources at their disposal an “extraordinary competitive advantage.”
Walmart’s latest endeavor marks a more deliberate push to expand into financial services after years of fitful efforts with a disparate set of offerings. This time, it’s established One as an independent company that sits outside Walmart, while the retailer still maintains control. And in partnering with Ribbit, Walmart picked an investor that counts fintech darlings like Coinbase Global Inc., Revolut and Robinhood Markets Inc. among its successful investments.
Representatives for Walmart and Ribbit didn’t comment. The fundraising is still being finalized and hasn’t closed, the people said, asking not to be identified as the information isn’t public. The $2.5 billion represents the valuation before the new money is raised.
The startup has hit the mark within two years of fully rolling out products in Walmart’s stores. It underscores why banking stalwarts have been keeping a wary eye on the retailer’s push into their turf: The ability to hook a vast customer base on to products beyond its core offerings.
This could be big competition in banking...
