(Bloomberg) — Walmart Inc. is pouring more firepower into its newest financial venture, securing a $2.5 billion valuation for the startup and signaling its ambition to move deeper into financial services.
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The world’s largest retailer is leading a fundraising of more than $300 million alongside investment firm Ribbit Capital, according to people familiar with the matter. This is a new valuation for the retail giant’s majority-owned One, which offers products targeting Walmart’s legions of customers and employees to gain a deeper foothold in financial services .
For the financial sector, the specter of companies like Walmart encroaching on their territory looms. Last year, Jamie Dimon, head of JPMorgan Chase & Co., identified the competitive threat from companies like Walmart, calling their hundreds of millions of customers and enormous resources an “extraordinary competitive advantage.”
Walmart’s latest move marks a more deliberate push to expand into financial services after years of on-and-off efforts with a disparate set of offerings. This time, One is being created as an independent company located outside of Walmart, while the retailer still retains control. And in partnering with Ribbit, Walmart has chosen an investor whose successful investments include fintech darlings like Coinbase Global Inc., Revolut and Robinhood Markets Inc.
Representatives for Walmart and Ribbit had no comment. The fundraising is still being finalized and has not yet closed, the sources said, asking not to be identified because the information is not public. The $2.5 billion represents the valuation before the new funds were raised.
The startup reached its goal two years after fully rolling out the products to Walmart stores. That underscores why banking industry stalwarts are warily watching the retailer’s push into its turf: the ability to lure a broad customer base to products beyond its core offerings. Yet right now, One is lagging behind the longer-running Revolut, Chime, and Robinhood.
Revenue, users
One, formed from the merger of two smaller companies, now has current revenue of more than $200 million based on its November results and processes more than $15 billion in payment flows. Its products include installment loans, debit cards and payment services, as well as early access to wages for more than 1.6 million Walmart employees in the United States.