Walmart has further strengthened its position in the Indian e-commerce market by purchasing Tiger Global’s remaining holding of Flipkart shares for a hefty sum of $1.4 billion. The transaction, which took place recently, marks a significant move by the retail giant to expand its stake in the Indian e-commerce startup.
Tiger Global, one of the earliest investors in Flipkart, has reaped impressive gains from its investment. Overall, the hedge fund made a staggering $3.5 billion profit on its initial investment of $1.2 billion, as confirmed by a person familiar with the matter. This deal adds to Tiger Global’s track record of successful investments in the Indian startup ecosystem, as it has poured over $6 billion into various Indian startups.
Flipkart, the leading e-commerce platform in India, holds a crucial position in Tiger Global’s portfolio. It is the only Indian startup in which the investment giant had invested more than $1 billion. Tiger Global’s financial backing supercharged Flipkart and played a pivotal role in putting India’s vibrant startup ecosystem on the global map.
The recent sale of secondary Flipkart shares valued the Bengaluru-based e-commerce giant at $35 billion. This valuation is slightly lower than the $37.6 billion it achieved in a funding round in 2021. The reduction in valuation is attributed to the split of payments startup PhonePe from Flipkart.
Walmart’s journey with Flipkart began in 2018 when it acquired a 77 per cent stake in the company for a staggering $16 billion, making it Walmart’s largest investment to date. With this latest buyout of Tiger Global’s stake, Walmart’s ownership in Flipkart is set to increase further. The retail giant held a 72 per cent share in the firm as of last year.
Despite the global smartphone market facing challenges, Walmart remains optimistic about Flipkart’s future and the opportunities that lie ahead in India. The spokesperson for Walmart stated, “We remain confident in the future of Flipkart and are even more positive about the opportunity in India today than when we first invested.”
As for Flipkart, the need for additional funding has emerged as the company has nearly depleted the capital raised in 2021. It is now seeking new funding rounds, and Walmart is expected to play a significant role in providing the majority of the required financing.
Flipkart has been a game-changer in India’s online retail landscape, focusing on smaller towns and cities and offering a diverse range of products and services. The platform’s success is driven by India’s rapid smartphone adoption and affordable mobile data, which has made e-commerce accessible to millions of people across the country.
With Walmart’s continued investment and Flipkart’s resilience in the competitive e-commerce market, the stage is set for further growth and innovation in India’s digital landscape.
