Walmart Buys Flipkart’s Remaining Stake from Tiger Global at $1.4 Billion
More About the Deal
The buyout happened a few days back when Tiger Global cashed out its shares. The company made an overall gain of $3.5 billion on an investment of $1.2 billion. The information came from hedge fund Investors with HQs in New York. The Wall Street Journal post reported the deal between the two.
Flipkart is the only Indian firm in which Tiger Global has invested above $1 billion, with $6 billion in Indian firms overall. Tiger Global’s investment in Flipkart gave the Indian startup scene a boost. Effectively establishing the country’s dominance as a global leader.
Flipkart had a valuation of $35 billion by the secondary share sale. Flipkart was given a $37.6 billion valuation at a financing round in 2021. But since the breakup of payments company PhonePe, it has internally reduced that value by about $5 billion.
Some More Info on Past Investments
According to a study by market intelligence company Tracxn, Walmart owned 72% of the company as of last year, despite having paid $16 billion for a 77% interest in Flipkart in 2018.
Another way to look at Walmart’s almost $20 billion investment in Flipkart is to consider that it is purchasing stock in a business that competes with Amazon’s local division, which was able to build a comparable enterprise in-house for less than $7 billion.
A Walmart representative said, “We are even more optimistic about the opportunity in India today than when we first invested. We remain confident in Flipkart’s future.”
Flipkart Bet on Walmart for Funding
Flipkart currently needs additional investment as the money it raised in 2021 has almost been spent. The Company has recently measured market interest, but no deal was finalized because of a lesser valuation. As a result, it appears likely that it will go back to Walmart to get most of the funding required for the following round.
As Flipkart plans to lock horns with Amazon, it should require a pile of working capital. The reason has been the rapid rise in small and medium industries which are on the rise in India since the Make in India campaign.
That being said, it Will be interesting to see how Flipkart uses this gold mine in Walmart.