Walmart pays $1.4 billion to buy out Tiger Global’s stake in Indian e-commerce startup Flipkart
Walmart has paid $1.4 billion to buy out hedge fund Tiger Global’s remaining stake in its Indian e-commerce startup Flipkart. In addition, the retail giant also acquired private equity firm Accel’s remaining 1% stake in the company, according to multiple media reports on Monday.
Tiger Global had previously sold off most of its Flipkart shares, and with this latest transaction, they made an impressive gain of $3.5 billion on their initial investment of $1.2 billion, as informed to investors by the New York-based hedge fund, according to a source familiar with the matter. The Wall Street Journal was the first to report on this deal.
In April 2022, we covered Flipkart after the Walmart-owned startup raised its IPO valuation target by around a third to $60-70 billion and set a 2023 date for its U.S. IPO listing.
As of 202, Flipkart had raised $3.6 billion in funding led by Japanese giant SoftBank. Back then, the unicorn startup was eyeing an IPO which later got delayed “due to Flipkart’s internal plan to boost valuations further by focussing on two of its relatively new businesses — online healthcare services and travel bookings,” two of the sources with direct knowledge told Reuters.
Two separate sources familiar with Flipkart’s plans also said that the ongoing global market turmoil sparked by the Russia-Ukraine crisis also forced the Indian company to reconsider its timeline.
“Flipkart thinks there is an even bigger upside of valuation than originally envisaged … The travel business has started showing great signs already for them,” said the first source. The first source said the IPO valuation target could be as high as $70 billion, while the second said it could be between $60-65 billion.
Flipkart was founded in October 2007 by Sachin Bansal and Binny Bansal, alumni of the Indian Institute of Technology Delhi and former Amazon employees. Just like in the early days of Amazon, Flipkart initially focused on online book sales with country-wide shipping.
Flipkart competes with Amazon’s Indian subsidiary and domestic rival Snapdeal. Flipkart held a 39.5% market share of India’s e-commerce industry as of March 2017. Walmart owns at least 77 percent stake in the company, with Tiger Global Management at 4.70%, Microsoft (1.3%), and Accel (1.1%). SoftBank sold its roughly 20% stake in the e-commerce firm to Walmart in 2018.
The Flipkart Group now includes Flipkart, the digital payments platform PhonePe, fashion specialty site Myntra, and eKart, a logistics and delivery service focused on solving the last mile in India’s Tier II and Tier III cities.