In a recent development, US-based e-commerce giant Walmart Inc. has acquired Tiger Global Management’s remaining stake in Flipkart, the Indian retail giant. The acquisition amount totaled $1.4 billion and is seen as a strategic move to further strengthen Walmart’s position in India’s rapidly growing consumer market.
Valuation Details
The transaction took place in the past few days and valued Flipkart at $35 billion. However, this valuation represents a decline from the nearly $38 billion valuation that Flipkart commanded during its 2021 funding round.
Boosting Walmart’s Investment and Providing Liquidity
By acquiring Tiger Global’s stake, Walmart is solidifying its commitment to the Indian retailer. This move is also aimed at helping Walmart provide distributions to its investors, especially at a time when accessing liquidity has become challenging.
Tiger Global’s Involvement
Tiger Global Management, through a letter sent to its investors, expressed its gratitude for the partnership with Flipkart and the opportunity to invest in the company during its early growth stages. This investment allowed Tiger Global to generate significant gains, totaling $3.5 billion. The company had initially invested $8.6 million in Flipkart’s Series B round back in 2009, at a valuation of $42 million. Subsequently, between 2010 and 2015, Tiger Global added $1.2 billion to its investment through various funds and vehicles.
Accel’s Stake Sale
In addition to Tiger Global, venture capital firm Accel also participated in the transaction by selling its 1 per cent stake in Flipkart to Walmart.
Walmart’s Growing Presence in India
Walmart’s entry into the Indian market began in 2018 when it paid $16 billion for a 77 per cent stake in Flipkart. Since then, the company has been actively expanding its footprint in India’s consumer market. Earlier this year, Walmart’s local payments business launched an online retailing app to facilitate local stores and smaller merchants.
Increased Stake in Flipkart
With this recent acquisition, Walmart’s stake in Flipkart has now increased to about 77 per cent, up from the previous 72 per cent.
Walmart’s acquisition of Tiger Global’s stake in Flipkart signifies the company’s commitment to India’s lucrative e-commerce landscape. As Flipkart continues to evolve and grow, this move is expected to further strengthen Walmart’s position in the Indian market and provide a boost to its overall business strategy.
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