According to recent reports in the e-commerce sector, Walmart, the American retailing giant, is increasing its ownership stake in the Indian e-commerce company Flipkart. This move is being achieved by acquiring shareholdings from Tiger Global Management for $1.4 billion.
By purchasing a 4% stake from Tiger Global, Walmart has raised its total shareholding in Flipkart from 72% to 76%. In 2018, Walmart initially acquired a 77% stake in Flipkart for $16 billion, and as of last year, it held a 72% share in the company.
Earlier this year, the Economic Times reported that Accel and Tiger Global, both early backers of Flipkart, were in discussions to sell their remaining stake in the company to Walmart. Subsequently, with Walmart’s decision to acquire shareholdings from Tiger Global, speculations have resurfaced that Walmart could be gearing up for Flipkart’s long-awaited initial public offering (IPO), which was promised back in 2018.
Meanwhile, some analysts speculate that this move could mark the commencement of another round of funding from Walmart to Flipkart. The valuation of Flipkart, which reached $37.6 billion during a funding round in 2021, experienced a significant decline after an internal assessment resulted in a $5 billion cut. Despite a slight recovery in their valuation since then, the funds raised from Walmart in 2021 were depleted faster than anticipated, leaving the company in need of further funding.
In recent months, Flipkart explored market interest for potential deals, but no agreement was reached primarily due to a lower valuation. Consequently, it appears highly probable that the company will once again approach Walmart to secure the majority of the required financing for its upcoming funding round.
Tiger Global bows out of Flipkart with gains
According to a person familiar with the matter, Tiger Global, after selling a significant portion of its Flipkart shares earlier, has achieved a remarkable return of $3.5 billion on an initial investment of $1.2 billion. The New York-headquartered hedge fund shared this information with its investors, and the deal was first reported by the Wall Street Journal.
According to reports, Flipkart stands as the only Indian startup in which Tiger Global has invested more than $1 billion. Notably, the U.S. investment giant has made substantial investments in Indian startups, amounting to over $6 billion in total. Among the Indian startups in Tiger Global’s investment portfolio are Pristyn Care, Slice, Upstox, Spinny, No Broker, Mensa Brands, CoinSwitch Kuber, Vedantu, Apna, Grofers, BharatPe, Blackbuck, Moglix, Urban Company, ChargeBee, ShareChat, Groww, Infra.Market, and Innovacer.
Following Tiger Global’s exit from Flipkart, the e-commerce company’s current major shareholder is Walmart, with Accel holding a 1 percent stake. Among the other investors in Flipkart are Tencent, SoftBank Vision Fund, DisruptAD, Khazanah Nasional Bhd, Willoughby Capital, Antara Capital, Franklin Templeton, and Tiger Global.
