Walmart has successfully acquired hedge fund Tiger Global’s remaining stake in the Indian e-commerce startup Flipkart for $1.4 billion. Additionally, the retail giant also acquired private equity firm Accel’s remaining 1% stake in the company, as reported by various media outlets.
Tiger Global had previously sold off most of its shares in Flipkart to Walmart. With this latest transaction, the New York-based hedge fund made an impressive gain of $3.5 billion on their initial investment of $1.2 billion, according to a source familiar with the matter. The Wall Street Journal was the first to report on this deal.
In April 2022, Flipkart, now owned by Walmart, raised its IPO valuation target to $60-70 billion and set a 2023 date for its IPO listing in the United States.
As of 2022, Flipkart had successfully raised $3.6 billion in funding, with Japanese giant SoftBank leading the investment. During that period, the unicorn startup had been considering an IPO, but the plans were delayed as the company focused on bolstering valuations through its relatively new ventures in online healthcare services and travel bookings, according to two sources with direct knowledge informed Reuters.
The ongoing global market turmoil caused by the Russia-Ukraine crisis also prompted Flipkart to reconsider its timeline for the IPO, as mentioned by two separate sources familiar with the company’s plans.
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According to the first source, Flipkart believes there is even more potential for higher valuation than initially envisioned, especially with the promising performance of their travel business. The IPO valuation target is now speculated to be as high as $70 billion, while the second source suggested it could range between $60-65 billion.
Founded in October 2007 by Sachin Bansal and Binny Bansal, both alumni of the Indian Institute of Technology Delhi and former Amazon employees, Flipkart’s early focus, much like Amazon’s early days, was on online book sales with nationwide shipping.
Flipkart is in direct competition with Amazon’s Indian subsidiary and domestic rival Snapdeal. As of March 2017, Flipkart held a significant 39.5% market share in India’s e-commerce industry. Walmart currently owns a majority stake of at least 77% in the company, followed by Tiger Global Management with 4.70%, Microsoft with 1.3%, and Accel with 1.1%. In 2018, SoftBank sold its roughly 20% stake in the e-commerce firm to Walmart.
The Flipkart Group now encompasses several entities, including Flipkart itself, the digital payments platform PhonePe, the fashion specialty site Myntra, and eKart, a logistics and delivery service aimed at resolving last-mile challenges in India’s Tier II and Tier III cities.
